Preamble

The House met at Half-past Two o'Clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

TEIGNMOUTH AND SHALDON BRIDGE BILL

Lords Amendments considered, and agreed to.

BARNSLEY CORPORATION BILL

Read the Third time, and passed.

MERSEY TUNNEL BILL

Read the Third time, and passed.

STAFFORDSHIRE POTTERIES WATER BOARD BILL [Lords]

Read a Second time, and committed.

Oral Answers to Questions — MINISTRY OF SUPPLY

Factories (Security Measures)

Mr. Donner: asked the Minister of Supply what security measures are in force in factories working for the War Office and the Air Ministry; what restrictions have been placed on the movement in such factories of foreign purchasing agents, particularly Russian, Polish, Roumanian, Bulgarian, Hungarian, Czechoslovak and Jugoslav; and how many such agents visited these factories in 1948.

The Minister of Supply (Mr. G. R. Strauss): It would not be in the public interest to disclose details of the security measures designed to prevent unauthorised access to information of a defence nature at contractors' works, but I am sending the hon. Member a copy of the Standard Conditions of Government Contracts, paragraphs 21 and 59 of which indicate the type of precaution taken. Many of the several thousand contractors employed by my Department undertake work of a non-defence nature,

and foreign purchasing agents may visit such firms in connection with this side of their work. It would not be possible without an unreasonable expenditure of time and labour to give the number of these visits.

Mr. Donner: Can the right hon. Gentleman give an unqualified assurance that under present arrangements there is no possibility of leaks of secret or technical information on developments?

Mr. Strauss: So far as I know, there have been no such leaks. I do not think there is any likelihood of them.

Mr. Gallacher: Will the right hon. Gentleman advise hon. Members and the Press to be careful how they speak about these countries, which are likely to become our means of salvation in view of the pressure of another foreign country which means this country no good? If hon. Members do not accept my word, let them take that of the Chancellor of the Exchequer.

Surplus Equipment (Handling)

Mr. Skeffington-Lodge: asked the Minister of Supply whether he is aware of the widespread carelessness of those handling surplus Government equipment offered for purchase to the public; and what steps are being taken to prevent unnecessary damage in loading and unloading it as well as during its transit from depôts to the sites of sale.

The Joint Parliamentary Secretary to the Ministry of Supply (Mr. John Freeman): No, Sir. I have no evidence that such stores are being damaged by careless handling. Frequent inspections are made of goods awaiting auction, and special care is taken in handling any fragile stores.

Mr. Skeffington-Lodge: If I bring to my hon. Friend's attention a specific example in my own constituency of the gross carelessness of the people handling Government stores, will he try to take some action about it?

Mr. Freeman: Of course.

Sir Waldron Smithers: May I ask the hon. Gentleman not to worry about this, because the taxpayer foots the bill for all this glorious Socialistic muddle?

Engineering Industry (Standardisation)

Mr. Albu: asked the Minister of Supply whether he has yet received a report from the committee which he set up to investigate standardisation in the engineering industry.

Mr. G. R. Strauss: Yes, Sir. I have received two interim reports from the committee, and I am expecting the main report soon.

Mr. Erroll: Will the Minister tell this committee not to dabble in nationalisation proposals?

Stores Disposal, Egypt

Mr. Erroll: asked the Minister of Supply what progress his inquiries into the working of the British Stores Disposals Mission in Egypt is making; and when a report on this inquiry will be available.

Mr. J. Freeman: A full reply to the points made by the hon. Member has been sent to him. It shows that his allegations were unfounded. There is no reason for issuing any further report.

Jet Engines (Fuel)

Mr. Erroll: asked the Minister of Supply why experiments are being conducted for the adaptation of jet aircraft engines for the use of petrol instead of vaporising oil.

Mr. G. R. Strauss: These experiments are being made so that our jet aircraft shall not be dependent upon one particular type of fuel.

Mr. Erroll: Is that indicative of the growing shortage of kerosene, which farmers are compelled to use because of the tax on petrol?

Mr. Strauss: Not necessarily. It is obviously desirable to see whether any other fuels can be effectively used.

Tudor Aircraft

Mr. Beswick: asked the Minister of Supply what number of Tudor aircraft are being converted to freighters; what will be the cost; and when they will be delivered.

Mr. G. R. Strauss: Ten Tudor aircraft are at present being converted into

freighters. Delivery will probably be completed before the end of the year. It would be contrary to established practice to disclose prices paid under Government contracts.

Mr. Beswick: asked the Minister of Supply what quantity of Tudor aircraft and aircraft parts ordered by his Department there are for which there are no customers; and to whom do these machines and parts now belong.

Mr. G. R. Strauss: Owing to reductions in the total number of Tudor aircraft on order, there are for disposal considerable quantities of material, components and equipment, which are the property of the Ministry of Civil Aviation, on whose behalf the contracts were placed. There are no complete Tudor aircraft for disposal by my Department.

Mr. Beswick: asked the Minister of Supply what is the total number of Tudor aircraft, of different marks, ordered by or through his Department; how many have been delivered to the national air Corporations; how many to private concerns; and what is the price in each case.

Mr. G. R. Strauss: As the answer contains a number of figures, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.

Mr. Beswick: In this information which is to be circularised, am I to be told the price of the aircraft concerned?

Mr. Strauss: I am afraid that that would be contrary to the usual practice. Those figures, I am afraid, I cannot publish.

Mr. Beswick: Can the Minister give me some guidance as to how we can find out how the taxpayers' money is being spent in this case?

Mr. Strauss: The accounts of all Government Departments, as my hon. Friend knows, are scrutinised by the Public Accounts Committee.

Mr. Beswick: Is it not the case that in reference to this particular business figures have been published in the public Press, and that the figures that have been published have given rise to a good deal of disquiet? Would it not be much better to give the facts of the case?

Mr. Strauss: I am sure my hon. Friend appreciates the difficulty of publishing figures showing the prices at which contracts are made.

Following is the answer:

The total number of Tudor aircraft, including prototypes, originally ordered was 105, of which 24 were Mark 1 and 81 Mark 2. Owing to subsequent reductions in the orders and changes to later marks, the position is now as follows:


Tudor Aircraft Mark
Delivered
Still on order


1
1
4


2
4
—


3
—
2


4
6
10


5
6
—


6
—
—


7
1
—


8
—
1


9
—
5


Total
18
22

Six Mark 4 and five Mark 5 have been delivered to B.S.A.A.C. and one Mark 2 and one Mark 5 to a private firm. It would be contrary to established practice to disclose the prices paid.

Oral Answers to Questions — MINISTRY OF WORKS

Ancient Monuments (Season Tickets)

Mr. Skeffington: asked the Minister of Works whether he will now make a statement on the issuing of an annual pass for ancient monuments what the price of the pass will be; and from where it can be obtained.

The Minister of Works (Mr. Key): Annual season tickets admitting the holder, accompanied by one other person, to all ancient monuments and historic buildings under the control of the Ministry of Works are now available at the price of El. Tickets may be obtained on application to the Secretary, Ministry of Works, at Lambeth Bridge House, London, S.E.1, or 122, George Street, Edinburgh.

Mr. Skeffington: While thanking my right hon. Friend for the imagination that he and his Department have shown, may I ask whether the lists of the ancient

monuments that he controls will be available?

Mr. Key: A good deal of information has been published about them. I may say that it applies to all ancient monuments under the control of the Ministry of Works; there is no restriction with regard to any of them. I will consider whether it will be possible to publish a list, but the list will have to cover something like 470 different establishments.

Embassies (Works of Art)

Mr. Vernon Bartlett: asked the Minister of Works whether he is aware that many British Embassies and Legations are without any examples of British art, whereas the Governments of many other countries have appreciated the cultural importance of thus exhibiting some of their best national pictures abroad; and whether he will give our diplomatic representatives greater facilities for selecting works of art suitable for the decoration of their Embassies or Legations.

Mr. Key: Numbers of pictures have been lent by the Trustees of the National and Tate Galleries for British Embassies and Legations, and the Tate Gallery have recently offered a considerable number. In addition, a small annual sum is at my disposal for purchases. Certain private owners have also generously provided pictures. But there is still a great need for examples of British art for Embassies and Legations, and I would welcome offers to lend works of art for this purpose.

Mr. Bartlett: Despite this access to pictures, is it not a fact that these Embassies and Legations are very short of pictures; and will the right hon. Gentleman do something to encourage the supply of better pictures?

Mr. Key: Yes, Sir, and I hope this Question and answer will assist in that. At the same time, I would point out that 75 pictures recently offered by the Tate Gallery are at present under consideration for allocation to various Embassies.

Mr. Henry Strauss: Could these Embassies be supplied with photographs of the latest mock-Tudor dining cars, in order that all should have evidence of the idiocy of which a nationalised undertaking is capable?

Vice-Admiral Taylor: In allocating pictures to Embassies, will the Minister take into account the different climates, so that the pictures shall not be damaged?

Mr. Godfrey Nicholson: Are we to understand from the right hon. Gentleman's reply that he does not propose to take any additional steps to meet this great need; and if that is the case, will not he reconsider the matter?

Mr. Key: I have already said that at the moment 75 pictures are under consideration for allocation, additional to those already distributed.

Mr. Wilson Harris: I trust the right hon. Gentleman will not overlook the canvases of the right hon. Member for Woodford (Mr. Churchill).

Factory, Feltham

Mr. Piratin: asked the Minister of Works whether he can now make a statement on the future of the factory premises formerly owned by General Aircraft Limited, Feltham, Middlesex.

Mr. Key: I have nothing to add at present to the replies which I gave to the hon. Member on 2nd May and to the hon. Member for South Salford (Mr. Hardy) on 23rd May.

Mr. Piratin: Is the right hon. Gentleman aware that his consideration of this matter has now been going on for some months; that this House has a right to know exactly what is to be the future of this factory in this locality; and can he hasten his reply?

Mr. Key: Negotiations are going on with the other Departments, and I will let the hon. Member know as soon as the information is available.

Building Licences, Chiswick

Mr. Francis Noel-Baker: asked the Minister of Works for what purpose his Department forwards each month to local authorities a list of building licences granted during the previous four weeks within the area of these authorities; what steps are taken to study the comments made by the local authorities upon these lists; and why his regional licensing officer, in letters dated 27th April and 23rd May, reference, CL5/A3/214715/1, refused to furnish the Plans and Town

Planning Sub-Committee of the Borough Council of Brentford and Chiswick with information regarding licences for work at 90, Turnham Green Terrace and 250, Chiswick High Road.

Mr. Key: Copies of licences issued by my Department are forwarded to local authorities to assist them in their work of detecting breaches of the licensing regulations and not for the purpose of inviting comments on the decisions. In accordance with these arrangements, copies of the licences mentioned in the Question were forwarded to the local authority, but it was unnecessary to communicate any further detail since they were outside the classes of cases in which the officers of the local authority have any responsibility for the decisions.

Mr. Noel-Baker: Is my right hon. Friend aware that very often local authorities have special knowledge of and very relevant comments to bring to bear on these questions; is he further aware that the local regional licensing officer for Brentford and Chiswick was lately neither helpful nor courteous and will he look into the matter?

Mr. Key: I have a good knowledge of local government, and I know that local authorities have valuable information, and we do avail ourselves of the opportunity of consulting them where it is found or thought to be necessary.

Mr. Frederic Harris: Does the Minister's reply mean that as the work goes on he really expects local authorities to watch the licences, from the snooping point of view, to see that it is carried out? Surely he does not mean that.

Mr. Key: No, Sir, I do not mean that. What I mean is that the local authorities are given information about the licences issued, so that if any matters come before them they may know whether or not we have issued a licence and the value of the licence issued.

Mr. Noel-Baker: Perhaps my right hon. Friend would find an opportunity of ascertaining the views of the borough of Brentford and Chiswick on the number of licences which have recently been granted by his Department, and which have caused a very great deal of feeling locally?

Mr. Key: I will look into this matter, but I have no reason to think that there is any more reason for looking into this case than into that of any other local authority.

Palace of Westminster (Alteration)

Mr. Keeling: asked the Minister of Works at whose behest and by what authority he has caused the doorway between the staircase down to the Harcourt Room and the passage to the House of Lords bar to be bricked up; and what the reason is for the alteration.

Mr. Key: The doorway in question has been bricked up as a necessary preliminary to the rebuilding of the Law Lords' Corridor, by my instructions, after consultation with the authorities of both Houses of Parliament. The existing staircase will be demolished and replaced by one on the other side of the Peers Terrace Entrance Corridor. An alternative doorway leading to the House of Lords bar has already been provided.

Mr. Keeling: Is the Minister aware that some kinds of drink available in the Lords bar are not available in our House; and will he give an assurance that the impaired access to the Lords bar is not intended to reduce communion between Members of the two Houses?

Mr. Key: I went down to inspect this myself this morning, and I understand that there is no obstruction whatever.

Mr. John Lewis: In view of the Minister's personal inspection, has he now under consideration the bricking up of the Lords bar altogether?

Mr. Key: That does not fall within my jurisdiction.

Mr. Martin Lindsay: Does not the right hon. Gentleman think it would be very much better if his Department finished the work on Westminster Hall, which has been going on for three and a half years, before blocking up any more exits and entrances in this House?

Mr. Key: The type of labour used in Westminster Hall is entirely different from that used to block up the doorway into the Lords bar.

Oral Answers to Questions — FUEL AND POWER

Gas Workers (Territorial Camps)

Major Tufton Beamish: asked the Minister of Fuel and Power whether he is aware that the Gas Council has not yet made any decision regarding leave and pay arrangements for employees who wish to attend Territorial Army camps; what is the cause of this lack of decision; and when an announcement can be expected.

The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. Robens): Owing to the short time which has elapsed since vesting date, the Gas Council has not been able to unify the widely varying practices of the gas undertakings in the country before nationalisation. The matter has, therefore, been left to the area boards to settle locally, but the Gas Council have asked the boards to deal with applications sympathetically.

Major Beamish: Is not this a very simple decision to take; could not the Gas Council co-ordinate this matter and take a decision at once?

Mr. Robens: There will be a unified policy within the areas of different gas boards this year. It is intended to formulate a national policy for next year.

Major Beamish: Will the practice vary between areas?

Mr. Robens: We shall unify it within the areas, but it will vary between the areas this year.

Major Beamish: Why?

Mr. Robens: Because of the varying practices followed in private enterprise prior to nationalisation.

Lubricating Oil (Re-refining)

Mr. Erroll: asked the Minister of Fuel and Power what assistance he gives to re-refiners of used lubricating oil in its collection to ensure that all used oil is being re-refined.

Mr. Robens: Advice is given by the Board of Trade salvage and recovery officers when they visit industrial premises. Where necessary they place


the industrialist in touch with the re-refiners. Not all used lubricating oil is, however, capable of being re-refined, and collection from outlying places is often uneconomical.

Mr. Erroll: Will the Minister, in conjunction with the Board of Trade, ensure that the maximum possible use is made of this oil so as to reduce further dollar imports?

Mr. Robens: That is our desire.

Petrol Ration

Sir Ian Fraser: asked the Minister of Fuel and Power whether he is now able to announce any further relaxation of the petrol rationing system.

Mr. Robens: No, Sir.

Sir I. Fraser: Is the hon. Gentleman not aware of the extreme importance to holiday makers and the holiday industry of having a little bit of extra standard petrol, at least till the end of the summer?

Mr. Robens: We understand the problems arising from petrol shortages. At the same time, we have an even greater problem in relation to the dollar situation.

Oral Answers to Questions — ELECTRICITY SUPPLIES

North-Western Board (Chairman)

Mr. J. Langford-Holt: asked the Minister of Fuel and Power what experience of the electrical industry is possessed by the newly-appointed chairman of the North-Western Electricity Board in the place of Mr. George Gibson.

Mr. Robens: The post of chairman of an area electricity board is an administrative one, for which previous experience in the industry is not essential. Sir Joseph Hallsworth has wide administrative experience and my right hon. Friend is satisfied that he is exceptionally well-fitted for the post.

Mr. Langford-Holt: Do we understand from that answer that the Parliamentary Secretary considers that, apart from administrative knowledge, no technical knowledge is either necessary or desirable in this type of case?

Mr. Robens: The hon. Member must have misheard. I was referring to the chairman of this particular Board. He is well supported by many experienced people on the Board.

Mr. Palmer: Is the Parliamentary Secretary aware that there is no feeling whatsoever amongst those who work in the industry against the appointment, and that these politically-inspired attacks are not supported in the industry, especially against a man of proved ability and integrity?

Mr. Robens: Yes, Sir; indeed, my right hon. Friend has now received a letter from the trade union side of the National Joint Industrial Council dissociating themselves from this opposition and expressing their confidence in Sir Joseph Hallsworth as being eminently suitable for the post.

Differential Tariff

Captain John Crowder: asked the Minister of Fuel and Power what representations he has made to the British Electricity Authority, asking them to look into the possibility of increasing the summer rebate under the differential tariff for electricity charges, when the financial results of the winter surcharge have been ascertained.

Mr. Robens: None, Sir. The British Electricity Authority have already publicly announced their intention of considering the matter when the necessary financial results are available. In any case the actual amount of any further rebate would be a matter within the discretion of the electricity boards.

Captain Crowder: Will the Parliamentary Secretary bear in mind that there is widespread dissatisfaction at the very high winter charges now that the consumers have received their accounts? Will he ask the British Electricity Authority to look into this again and give a higher rebate for summer consumption as soon as possible?

Mr. Robens: The British Electricity Authority have already made an announcement about that. As soon as they have the necessary information they will make a public statement.

Mr. Piratin: Is the Parliamentary Secretary aware that the public were


under the impression that the summer charges would on balance offset the winter charges, or, in other words, that the charges would be so much less during the summer? Is he aware that the public feel that as so much less electricity is used during the summer, they will be the losers in the matter? Will he see that the charges are substantially reduced?

Mr. Robens: It was clearly understood, in putting the Clow Committee's Report into operation, that it was not intended that the British Electricity Authority should make a profit. When the financial results are known they will give consideration to an extra rebate, if that is necessary.

Mr. A. Edward Davies: Will my hon. Friend note that there is widespread dissatisfaction at this differential method of charging, and will he try to avoid the necessity of these rebates in the future, as it is a great hardship to the working classes?

Captain Crowder: Can the Parliamentary Secretary say what the charges will be for the June quarter, because the meters are now being read?

Mr. Robens: It is not a question of charges but of rebates.

Oral Answers to Questions — COAL INDUSTRY

Coalface Workers

Mr. A. Edward Davies: asked the Minister of Fuel and Power what progress has been made so far this year in increasing the number of coalface workers; and what special steps are being taken to reach the target of 310,000 by the end of 1949 as set out in the Economic Survey.

Mr. Robens: For the first quarter of this year the number of coalface workers on the colliery books increased at a steady and fairly satisfactory rate. In the next two months there was a decline, the causes of which are being examined but which may be of a temporary nature only. I am not at present able to say whether as a result of this examination the National Coal Board will consider that any further special measures are called for.

Mr. Davies: Has anything been done within the industry to transfer experienced miners to the coalface and to bring in new men to do their jobs?

Mr. Robens: Yes, Sir.

Mr. Gallacher: Did the Parliamentary Secretary see the statement by one of the Coal Board officials in Scotland, that they will have to get rid of 60,000 of their present miners? Does the Minister approve of that statement?

Mr. Robens: That is a different question.

Colonel Clarke: is the Parliamentary Secretary satisfied with the progress that is being made in getting foreign workers into the pits, or is their entry into the pits resisted in a number of districts?

Mr. Robens: A substantial number are already in the pits, but the scheme has now been closed for the mining industry.

Stocks (Opencast Coal)

Mr. Sutcliffe: asked the Minister of Fuel and Power to what extent opencast coal, which is not suitable for open-air storage, is being substituted for deep-mined coal for winter stocks.

Mr. Robens: Opencast coal is not specifically set aside for stocking purposes. Nearly the whole of current production of saleable opencast coal is being distributed, and it is for consumers and merchants themselves to decide whether and to what extent they retain any proportion of their allocation of such coal for building up end-summer stocks.

Mr. Sutcliffe: Is the Parliamentary Secretary aware that the allocation of opencast coal for the whole of this summer is no less than 10.7 per cent., and that supplies of good coal in this area are worse than they have ever been at any time, even during the war? Is he further aware that only good coal is suitable for stocking, and this means that customers today are mostly compelled to have opencast and soft coal?

Mr. Robens: Owing to the Lancashire dispute, it was necessary to put an increased amount of opencast coal into the area, but now that production is back to normal, the amount of opencast coal will be reduced to the average amount for the region.

Board's Report

Mr. Ernest Davies: asked the Minister of Fuel and Power if he will arrange for the publication of a brief


summarised edition of the report of the National Coal Board and make it available at a popular price.

Mr. Robens: The National Coal Board are considering what means should be adopted to bring the contents of the report to the notice of a wider public, and in particular of the members of colliery consultative committees. Meanwhile, I understand, a summary of the report will be published in the next issue of the Board's magazine "Coal."

Mr. Davies: Will my hon. Friend consider publishing this as a White Paper in order that it can be available to the general public at a popular price?

Mr. Robens: Publication is not my right hon. Friend's responsibility. He is responsible merely for presenting the report to Parliament. If the National Coal Board do produce a popular edition at a low price, I am sure it will meet the wishes of the House and my hon. Friend.

Mr. Keeling: Can the Parliamentary Secretary give an assurance that in any reprint or abbreviated form of this report the unfortunate misprint on page 15 will not be repeated?

Mr. Robens: The hon. Member can be satisfied my right hon. Friend and the Coal Board have had that matter drawn to their attention on many occasions and that it is hardly likely to be repeated.

Oral Answers to Questions — LEASEHOLD REFORM (INTERIM REPORT)

Mr. George Thomas: asked the Attorney-General what proposals he has for legislation following upon the Interim Report of the Committee on Leasehold Reform.

Mr. Thurtle: asked the Attorney-General whether the Government propose to introduce legislation to safeguard the position of sitting tenants of business premises as suggested by the Interim Report of the Leasehold Committee.

Mr. Skeffington: asked the Attorney-General whether, in view of the hardship to thousands of small businesses all over the country, he will introduce legislation at an early date to implement

the Interim Report of the Leasehold Committee.

The Solicitor-General (Sir Frank Soskice): The Government propose to defer reaching a decision on the proposals contained in the Interim Report until they have had an opportunity of considering any recommendations that may be made in the final Report of the Leasehold Committee.

Mr. Thomas: Is the Solicitor-General aware that his reply will cause considerable disappointment, because the present system is causing hardship and insecurity among business people? Is he further aware that the matter is of particular urgency?

The Solicitor-General: I am aware that the matter is one of great importance, but it is also extremely complex and requires full consideration in all its aspects before any steps are taken.

Mr. Skeffington: In view of the fact that the Committee has gone into such great details on this matter and has made specific recommendations, surely the complexity of the subject cannot be any reason for not doing justice to a deserving section of the community?

The Solicitor-General: In spite of the fact that the recommendations are made, very full consideration has to be given as a result of the recommendations.

Lieut.-Colonel Lipton: If a decision is to be delayed until the final Report is issued, can the Solicitor-General give an assurance that the proposed legislation will not be limited merely to those leases signed after the Report has been implemented by Act of Parliament?

The Solicitor-General: I cannot add to what I have already said in regard to the Government's decision.

Mr. Hector Hughes: Will my right hon. and learned Friend say whether the Government will put into operation the proposals, or some part of them, piecemeal, particularly with regard to the elimination of intermediate interests which operate so harshly upon the community at present?

The Solicitor-General: I have already said what the Government's decision is, and I cannot add to what I have already said.

Oral Answers to Questions — SOAP RATION

Sir Ian Fraser: asked the Minister of Food whether he is now able to make any relaxation of the present soap rationing system.

The Parliamentary Secretary to the Ministry of Food (Dr. Edith Summer-skill): I would refer the hon. Member to the reply given by my right hon. Friend to the hon. Member for Macclesfield (Air-Commodore Harvey) on 16th May and to his statement in the Adjournment Debate on 3rd June.

Sir I. Fraser: Since they were so unsatisfactory, cannot the Parliamentary Secretary add something?

Dr. Summerskill: If the hon. Member reads the Adjournment Debate, he will find that the matter was dealt with very thoroughly.

Lieut.-Colonel Sir Thomas Moore: Can the Parliamentary Secretary say what saving of soap resulted from the campaign of the Minister of Fuel and Power for fewer baths?

Oral Answers to Questions — FOOD SUPPLIES

Points Rationing

Sir I. Fraser: asked the Minister of Food whether he will now make a further statement on the future of the points rationing scheme.

Dr. Summerskill: I cannot add to the statement made on this subject by my right hon. Friend in the House on 3rd June.

Sir I. Fraser: When may we hope that the Parliamentary Secretary will be able to add anything encouraging?

Dr. Summerskill: The hon. Member has not said what he wants me to add. I shall be only too happy to answer him if he will tell me what particulars he wants me to answer.

Sir I. Fraser: To get rid of the points as quickly as possible.

Dr. Summerskill: I am certainly prepared to answer that. The answer is a simple one and has been given on many occasions. There are certain foods, such as canned meat, canned fish, dried fruits and canned fruits which are in very short supply, and until we can equate supplies

to demand we feel we must retain the points system.

Mr. Langford-Holt: Is the right hon. Lady telling the House that snoek is in short supply, because there are tons of it in my constituency and no one will buy it?

Dr. Summerskill: If the hon. Gentleman will listen to the answer which I shall give to a Question dealing with that commodity, I am sure he will change his mind.

Potatoes and Carrots

Sir W. Smithers: asked the Minister of Food, in view of the fact that potato merchants are cancelling outstanding orders to his Department for potatoes because they lose money on every bag, how many tons of the 1948 crop he now possesses; and if he will reduce prices to enable them to be used.

Dr. Summerskill: I know of only one case where this is the alleged ground for cancelling an order. The small remaining stocks of 1948 crop potatoes have now all been ordered, and the last part of the Question does not therefore arise.

Sir W. Smithers: As the Ministry has already lost £10 million, and probably a good deal more, in speculations over last season's potato crop does the right hon. Lady realise that it is impossible for a Government Department to control the distribution of potatoes without a serious loss of food and a serious loss to the taxpayer? May I have an answer? As the right hon. Lady is incapable of answering, I will ask Question No. 37.

Sir W. Smithers: asked the Minister of Food if he will instruct his officers to do business over the telephone, which is common practice in the industry, for orders for potatoes and vegetables.

Dr. Summerskill: No, Sir; normally we arrange to supply potatoes and carrots for human consumption only for a month or two at the end of the season. Our transactions, therefore, do not enable us to establish trade relationships which would justify business being conducted on the telephone.

Sir W. Smithers: Is the right hon. Lady aware that dealers in perishable foods want their produce at the market within


12 hours? In the old days they telephoned their dealers and got it; now they have to telephone the Ministry, and all the answer they get is "Fill up 14 forms," which means that they get delivery in a week.

Dr. Summerskill: I am sure that the hon. Gentleman will agree that potatoes are not highly perishable, and that the House would expect us to have an order of this kind confirmed in writing.

Sir W. Smithers: The Ministry do not trust anybody.

Fats (Containers)

Mr. Skinnard: asked the Minister of Food whether he will take steps to prevent the practice of wholesalers in delivering margarine to retail grocers in unlined cardboard containers, the unpalatable flavour of which has in some cases made the contents unsaleable.

Dr. Summerskill: All bulk margarine is supplied in parchment-lined containers. We have received no complaints that wholesalers are delivering margarine in unsatisfactory containers, but if my hon. Friend will let me have details of any case he has in mind I shall be glad to have the matter investigated.

Mr. Skinnard: asked the Minister of Food whether he is aware that cooking fat is being delivered to retail grocers in wooden cases which are not sterilised when returned for re-issue and that the fat is contaminated by dirt penetrating the greaseproof paper container; and whether he will refer this matter to the working party for the catering trade and consult the Minister of Health and Secretary of State for Scotland on the possibility of further action to ensure hygienic distribution.

Dr. Summerskill: We must continue to use returned containers until better packing materials are available. All used containers are cleaned and lined with new parchment paper before being used again. We shall continue our efforts to supply new containers, but it must be some time before we can guarantee to do so.

Mr. Skinnard: Is my right hon. Friend aware that retailers complain that, especially in hot weather, the product

seeps through the present detachable lining? Would it be possible to have a more suitable lining?

Dr. Summerskill: I can assure my hon. Friend that we have had few complaints of this character, and that the retailer can have the fat replaced if it is contaminated.

Mr. Skinnard: Yes, but surely that entails a loss of fat.

Tea Rationing

Mr. Shurmer: asked the Minister of Food in view of the more favourable position of our tea stocks, if he will increase the weekly tea ration to the 2½ ozs. received before the last cut in 1947.

Dr. Summerskill: Although increased quantities have been contracted for this year, the tea has yet to arrive. We shall certainly increase the ration when it is safe to do so.

Mr. Shurmer: Is my right hon. Friend aware that the small tea ration hits single people and old couples very hardly, and results in driving them to drink beer?

Dr. Summerskill: I cannot agree. Most old-aged pensioners prefer weak tea to going into public houses.

Mr. Piratin: The right hon. Lady referred to deliveries. Is it not the case that stocks are now much higher than they have been during the past few years? Is it not possible to increase the ration?

Dr. Summerskill: Perhaps the hon. Gentleman will tell me what the stocks are.

Sir Patrick Hannon: Is the right hon. Lady aware of the immense popularity of tea in Birmingham, and will she try to meet the proposal made by the hon. Member for Sparkbrook (Mr. Shurmer)?

Dr. Summerskill: I agree; I was in Birmingham a fortnight ago, when I had some of the best tea I have ever had.

Canteen Prices

Mr. Piratin: asked the Minister of Food whether he is aware that the prices of foodstuffs have been raised in many industrial canteens; and what steps does he propose to take to reduce them and maintain them at the prices formerly operating.

Dr. Summerskill: While my right hon. Friend is anxious that the price of canteen meals should be as low as possible, it is not practicable to impose a price limitation for this purpose.

Mr. Piratin: Why not?

Dr. Summerskill: I thought I told the hon. Gentleman the other night, in a Debate on a Prayer, that it is virtually impossible to enforce maximum prices for all sandwiches. Many hundreds of different sandwiches are produced, and it would discredit our orders if we were unable to enforce maximum prices.

Spanish Wine (Imports)

Mr. Piratin: asked the Minister of Food what was the value of wines imported from Spain during the last full year to the end of May; and whether, in view of the unfavourable balance of trade with Spain, he will restrict imports of wine from that country.

Dr. Summerskill: The value of wine imports from Spain during the year ended 31st May, 1949, was £2,153,388. I am advised that this country's balance of payments with Spain is not at present unfavourable.

Mr. Piratin: In view of the need to restrict imports of a non-essential character, can the right hon. Lady justify the importation of £2 million worth of wine this year?

Dr. Summerskill: We have never said that we shall restrict consumption of, say, sherry, of which this importation largely consists.

Oral Answers to Questions — ELECTRICITY INDUSTRY (MINISTER'S SPEECH)

Mr. Boyd-Carpenter: asked the Prime Minister whether the speech of the Minister of Fuel and Power to the Electrical Trades Union sets out the policy of His Majesty's Government with respect to the replacement by others of persons at present employed in managerial and technical capacities in the electrical industry.

The Lord President of the Council (Mr. Herbert Morrison): I have been asked to reply. The Press reports of the speech were necessarily condensed, and some of

them may have given a wrong impression. My right hon. Friend was not suggesting that any of the managers at present employed in the electricity industry should be replaced, but merely that if workers were to be in a position to compete for managerial posts as vacancies arose they must have opportunities for training and promotion.

Mr. Boyd-Carpenter: Does that welcome denial include a contradiction of the report which appeared in a number of newspapers, to the effect that the Minister of Fuel and Power had indicated an intention to remove competent technicians from the industry and replace them with what he described as "our own people"?

Mr. Morrison: I think it is clear from the reply I have given that my right hon. Friend had no such intention. The hon. Member can therefore rest in peace on that point.

Mr. Godfrey Nicholson: Did the Minister of Fuel and Power consult the Cabinet or the Prime Minister before making what might have been a most important speech?

Mr. Morrison: I do not know, but if all Ministers had to consult the Prime Minister before making speeches, it would keep my right hon. Friend very busy.

Mr. Albu: Is my right hon. Friend aware that Members on these benches welcome the suggestion that there will be an opportunity in all trades for members of trade unions, of all sorts of ranks, to reach the highest level?

Mr. Morrison: I am quite sure that that would be so.

Oral Answers to Questions — FESTIVAL OF BRITAIN

Mr. Hector Hughes: asked the Lord President of the Council if he will arrange that the itinerary of the land-borne and sea-borne exhibitions which will tour the United Kingdom under the Festival of Britain, 1951, shall include the City of Aberdeen.

Mr. H. Morrison: No, Sir. The itinerary of the land-borne and the seaborne travelling exhibition of the Festival of Britain has been considered most carefully in relation to the whole country and, since the whole of the Festival season will


be required to cover the agreed itinerary, I regret that no additions can be made to it.

Mr. Hughes: Is not my right hon. Friend aware that this would exclude the whole of the North-East of Scotland, which would do much to contribute to the success of the exhibition? Will he say why that large piece of territory is being excluded?

Mr. Morrison: I am not sure that my hon. and learned Friend is right. The sea-borne exhibition is to visit Greenock and Dundee. I would like to have seen Aberdeen included, but not every port can be covered and I much regret that Aberdeen cannot be included.

Mr. Wilson Harris: Surely the right hon. Gentleman will agree that there is an "organisational" aspect to this question. Is he satisfied that the proposed arrangements are organisationally possible?

Mr. Morrison: If my hon. Friend goes on like that, I shall have to write to the editor of the "Spectator" about it.

Mr. F. Noel-Baker: Will my right hon. Friend consider arranging for a river-borne exhibition to travel past the coast of the Borough of Brentford and Chiswick up the Thames?

Sir P. Hannon: Does the right hon. Gentleman contemplate sending the exhibition to Belfast?

Mr. Morrison: My recollection is that something favourable is happening in regard to Belfast, but I would not like to commit myself without notice.

Oral Answers to Questions — GERMANY

Political Parties

Mr. Bramall: asked the Secretary of State for Foreign Affairs whether he is satisfied that the composition and policy of the Right German Party, which was recently allowed to contest local elections in Wolfsburg, Lower Saxony, are substantially different from those of the German Right Party which was recently banned by the British Control authorities on the grounds that it was opposed to the free development of democratic practices in Germany: and

if he will make a statement on the matter.

The Under-Secretary of State for Foreign Affairs (Mr. Mayhew): The two parties are substantially different, the German Right Party being smaller and more local than the German Party. The right wing of the German Party has recently absorbed some members of the German Right Party in the Wolfsburg area, where the German Right Party was banned for undemocratic practices in and after the elections held there in November, 1948, and our authorities are watching the situation carefully. My right hon. Friend is satisfied, however, that there is at present no cause for further intervention.

Mr. Bramall: Is my hon. Friend aware that the answer he gives reveals that he has completely misunderstood the question? He referred throughout to the German Party, and he will see that there is no reference to the German Party, which is an entirely different party from the one mentioned in my Question. It refers to the German Right Party and the Right German Party. Is he aware that both of these are purely local organisations, that they both consist substantially of the same people with substantially the same programme, that they are standing at the elections in Wolfsburg and that this is merely an invasion of Military Government rules?

Mr. Mayhew: If my hon. Friend studies my reply, he will see that we are not so far apart as he thinks. What I was taking him to mean by the Right German Party was the right wing of the German Party, and that is the correct way of interpreting his Question.

Mr. H. Hynd: For the information of the House, would my hon. Friend say which is the right party?

Book (Distribution)

Mr. Bramall: asked the Secretary of State for Foreign Affairs what action he proposes to take about the circulation in the British zone of Germany of the book entitled, "Hitler as War Lord," by General Heilder, which justifies Germany's invasion of Allied countries and the part played by the German army in the late war.

Mr. Mayhew: This pamphlet was recently published under American licence in the United States zone. There are no restrictions on the distribution of publications between the British and American zones, and my right hon. Friend does not think the circumstances warrant any departure from our normal practice.

Mr. Bramall: Does my hon. Friend think that the purposes of our occupation in Germany are well served if we allow publication of a book which records as the only dissatisfaction with the Nazi regime the fact that Hitler was inefficient enough to lose the war, and which justifies the German invasion of Allied countries?

Mr. Mayhew: I agree with my hon. Friend that there are bad parts in this book, but we have gone into the matter carefully and we feel that on balance, suppression would do more harm than good.

Communications, Berlin

Major Tufton Beamish: asked the Secretary of State for Foreign Affairs if he will make a statement on the situation in Berlin, with special reference to traffic between the city and the three Western zones.

Mr. Mayhew: The settlement of the railway strike in Berlin, which was announced yesterday, will result in the resumption of rail traffic between Berlin and the Western zones as from 28th June. Road transport and inland water transport links between Berlin and the Western zones are already in operation. However, the arrangements for rail, road and canal communications are not at present satisfactory. They will, I hope, be improved and supplemented as a result of the agreement reached at the Council of Foreign Ministers on 20th June.

Major Beamish: Could the Under-Secretary say what restrictions are holding up traffic?

Mr. Mayhew: It is difficult briefly to describe what they are, but I would be prepared to give further information if a Question is put down.

Berlin Air Lift (Cost)

Sir W. Smithers: asked the Secretary of State for Foreign Affairs what is the

cost of the Berlin air lift to date since its inception; and what proportion of the cost is borne by the British taxpayer.

Mr. Mayhew: The extra cost to the British taxpayer up to 15th June, 1949, was approximately £8,600,000. I regret that I have no information as to the costs borne by the United States Government. In terms of weight carried into Berlin, however, the British contribution has been about 23½ per cent. of the whole.

Sir W. Smithers: What steps are the Foreign Office taking to tell the German people of the wonderful actions we have taken to save them from starvation, which the Communists are trying to use as a weapon to destroy the German people?

Mr. Mayhew: I do not think the German people need persuading about the air lift.

Mr. H. Hynd: Could my hon. Friend say what steps are being taken to ask France to take a share in the cost of the air lift?

Mr. Mayhew: I should need notice of that.

War Pensions

Mr. Skeffington-Lodge: asked the Secretary of State for Foreign Affairs what progress has been made in assessing and paying pensions due for war service to ex-members of the German forces.

Mr. Mayhew: The only pensions for war service payable to former members of the German armed forces are disability pensions. Since August, 1947, when these were included in the Industrial Accident Insurance Scheme, nearly a million pensions have been reassessed and about 900,000 new claims considered. About 50,000 new claims are being received every month.

Mr. Skeffington-Lodge: Is my hon. Friend aware that there is intense hardship amongst many wounded and limbless members of the German armed forces and that many of them have no pensions at all, and are there no steps which can be taken in order to assist in this very serious situation?

Mr. Mayhew: Yes, Sir, I am aware of the hardship caused, but it is a question of what the German economy can bear.

Mr. Godfrey Nicholson: Does the answer apply only to the British zone?

Mr. Mayhew: I believe it is a bizonal scheme.

Sir I. Fraser: Is the hon. Gentleman correct in referring to these as war pensions? Are they not the same very meagre compensation as is paid in all cases of hardship?

Mr. Mayhew: I am distinguishing between war pensions and long service pensions, which aroused some interest in the House recently.

Mr. Albu: Is not the distribution of the German income a matter for the Germans themselves?

Mr. Mayhew: In these Wehrmacht matters, we have occasionally had to issue regulations.

Gelsenberg Benzin Company

Mr. Skeffington-Lodge: asked the Secretary of State for Foreign Affairs on what grounds a licence was granted for the making of improvements to the factory of the Gelsenberg Benzin Company, operating in the British zone of Germany, when this establishment is one earmarked for destruction.

Mr. Mayhew: The licence granted was of a temporary and limited character for the reactivation of that part of the plant necessary to process 15,000 tons of natural oil per annum.

Mr. Skeffington-Lodge: Is it true that 17 million marks have actually been expended on this particular factory and that it is now going to be pulled down?

Mr. Mayhew: That is the sum alleged by the Germans, but it seems a fantastically large sum for the work done.

Refugees' Bank Accounts

Sir T. Moore: asked the Secretary of State for Foreign Affairs whether it is with his approval that pre-war German refugees from Nazi oppression now resident in this country have had their blocked savings in Germany reduced by 70 per cent. at the order of the Military Government.

Mr. Mayhew: This cancellation concerned that part of bank accounts in Western Germany which was blocked

following the currency conversion of June, 1948, and was carried out by the three Occupying Powers as part of the currency reform operation. It was applied uniformly to all accounts and it would not have been possible to give preferential treatment to the accounts of any particular class of individuals.

Sir T. Moore: Is not that answer misleading? Is it not true that these unfortunate people first of all lost 90 per cent. of their savings on the devaluation of the mark, and are they not now suffering loss of a further 70 per cent. of what is left? Surely we cannot agree to a monstrous injustice like that.

Mr. Mayhew: I can only say that undoubtedly cases of individual hardship occurred when this currency conversion took place, but it simply was not possible to make exceptions.

Icelandic Fish (Payment)

Sir David Robertson: asked the Secretary of State for Foreign Affairs if he is now in a position to say whether the cargoes of two Icelandic trawlers which arrived off German ports during the week commencing 22nd May and which were in excess of the number the Icelandic Government have been requested to deliver and which went to fishmeal, have to be paid for by His Majesty's Government.

Mr. Mayhew: The question of the obligation for payment is still under consideration; I will communicate with the hon. Member as soon as a decision has been reached.

Sir D. Robertson: What kind of contract have we entered into which leaves any doubt whether we should pay for fish which we did not order, and fish which is bad?

Mr. Mayhew: The circumstances in which the fish was rejected were somewhat unusual. This is a legal question which is now being decided, and I cannot comment on it.

Sir D. Robertson: Will the Under-Secretary see that a copy of this contract is placed in the Library for hon. Members to see?

Mr. Mayhew: I will certainly consider that if there is a general wish.

Oral Answers to Questions — INTERNATIONAL WHEAT AGREEMENT

Mr. Hurd: asked the Secretary of State for Foreign Affairs if His Majesty's Government have decided to sign the International Wheat Agreement which is due for ratification by 1st July.

Mr. Mayhew: Yes, Sir. His Majesty's Government have already signed the International Wheat Agreement and intend to ratify it before 1st July.

Mr. Hurd: Could the Minister tell us whether enough countries have signified their intention to ratify so as to ensure that this agreement will come into operation in August?

Mr. Mayhew: I should need notice of that question.

Oral Answers to Questions — SUEZ CANAL (DETAINED SHIPS)

Mr. Gammans: asked the Secretary of State for Foreign Affairs if he will make a statement on the detention by the Egyptian Government of British ships in the Suez Canal area.

Mr. Mayhew: In response to our recent representations, the Egyptians have agreed to abolish military inspection of ships, to speed up inspection, to cease demanding certificates of ultimate destination and to inspect only suspected military cargo. However, we do not consider these concessions to be adequate, and are continuing to press strongly for the abolition of all restrictions.

Mr. Gammans: Is the Government going to put in any claim for compensation for the loss that many British shippers have suffered because of the delay imposed upon their ships?

Mr. Mayhew: The question of compensation may well arise.

Oral Answers to Questions — BURMA (ASSISTANCE)

Mr. Gammans: asked the Secretary of State for Foreign Affairs if he will make a statement on the results to date of the informal conference between India, Pakistan, Ceylon and the United Kingdom regarding assistance to the Government of Burma.

Mr. Mayhew: Representatives of the Governments concerned have been discussing assistance with the Government of the Union of Burma in Rangoon. The Burmese Government have expressed gratitude, and have indicated that they do not desire to incur external financial liability unless it is absolutely necessary. They have deferred a decision on this matter. Meanwhile, arrangements are in hand for the supply to the Government of the Union of Burma of arms and military equipment required by them.

Mr. Gammans: Is the hon. Gentleman aware of the concern felt by some of us in this House that the arms being supplied to the Government of Burma are being used against the Karens and not only against the Communists? In view of the record of the Karens during the war, does he realise that that is causing some of us a lot of concern?

Mr. Mayhew: I can only say that our object is the assistance of the legal Government in Burma.

Mr. Bramall: Has not the state of affairs to which the hon. Gentleman the Member for Hornsey (Mr. Gammans) has referred arisen because the Karens are now wholeheartedly supporting the Communists?

Oral Answers to Questions — MIDDLE EAST OFFICE (FUNCTIONS)

Mr. W. Fletcher: asked the Secretary of State for Foreign Affairs what are the exact functions of the Middle East office in Cairo; and what personnel are employed in that office.

Mr. Mayhew: As the answer is long I will, with permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

The principal functions of the British Middle East Office are, firstly, to report upon events and issues, political, economic, financial and social, affecting more than one territory in the Middle East; secondly, to develop and ensure the co-ordination of His Majesty's economic, financial and social policy in that area and to make recommendations as to action required.

The British Middle East Office consists of a Head (Sir J. M. Troutbeck, K.C.M.G.) and a Deputy Head (Mr. J. W. Wall), both of whom are senior


Foreign Service Officers, and of a Development Division, together with a small subordinate staff. The services of the Middle East Representatives of the Treasury, the Ministry of Fuel and Power and the Ministry of Civil Aviation are also available to the Head of the British Middle East Office.

The members of the Development Division are available to advise Middle East Governments on social and economic development at their request, and in the three years since the Division was set up their services have been in increasing demand.

The Division consists of highly qualified advisers on labour, health, forestry and soil conservation, statistics, entomology, animal husbandry (this post is at present vacant).

Examples of their work are: the organisation of central statistical offices for the Persian and Iraqi Government; collaboration with the American consortium, Overseas Consultants, Incorporated, in advising the Persian Government on the implementation of their seven-year plan, with special reference to agriculture, forestry and soil conservation, animal husbandry and statistics; advice to the Middle East Governments on measures to combat the desert and Moroccan locusts; advice to the Middle East Governments on the preparation of labour legislation and trade union and national insurance policy; assistance to British companies in the Middle East who are large employers of labour, such as the Anglo-Iranian Oil Company and the Iraq Petroleum Company, in the development of social welfare amenities, trade co-operative societies, etc., and advice on the application of local labour legislation to their own labour problems; advice to the Egyptian Government in the control of their cholera epidemic in 1947–48; and assistance to various Middle East Governments in the recruitment of British technical advisers.

Oral Answers to Questions — BRAZIL (CONSULAR INVOICES)

Mr. W. Fletcher: asked the Secretary of State for Foreign Affairs whether, in the interests of increased reciprocal trade between this country and Brazil, he will approach the Brazilian Government

for a reduction of the high fees charged for consular invoices and for the restrictions caused by the interpretations placed upon such invoices by Brazilian consular officials.

Mr. Mayhew: No, Sir, for these fees are not abnormally high compared with those charged in some other countries. If the hon. Member will let me have any particulars of unusual restrictions, I will be glad to look into the matter.

Mr. Fletcher: Is not the hon. Gentleman aware that not only are the fees among the highest charged, but that penal fines are imposed on people who inadvertently transgress, and that this is really impeding trade between the two countries, which we wish to foster? Will he make representation to the Brazilian Government on this matter?

Mr. Mayhew: The Question is about fees. If the hon. Gentleman will put down a question about fines, I will look into it.

Oral Answers to Questions — CHINA

British Nationals' Claims

Mr. Gammans: asked the Secretary of State for Foreign Affairs what steps he proposes to take to grant compensation for war losses suffered by British nationals in China who had been told by His Majesty's Government that they must look to Japanese reparations for relief, in view of the fact that the Government of the United States of America have made the decision that no further reparations shall be exacted from Japan to meet the claims of allied nationals.

Mr. Mayhew: The United States have suspended allocation of reparations authorised under an interim scheme, but have not made any such decision as is suggested by the hon. Member. British nationals have not been told that compensation for their war losses in China must await the receipt of reparations payments from the Japanese. They have been informed that consideration will be given, at the conclusion of a Peace Treaty, to the presentation of claims against Japan for individual war losses suffered by Allied nationals in China and elsewhere.

Mr. Gammans: Is the Minister aware that he himself told me, in answer to a Question on this very point, that the hope


of getting compensation must depend upon Japanese reparations? In view of the fact that the Government have recently made an ex gratia payment towards a similar effort in Burma, does not the Minister feel that something ought to be done for these unfortunate people in China?

Mr. Mayhew: I was distinguishing between claims payable under reparations and claims against Japan made as part of the treaty by individual claimants. I think my answer makes that point clear.

Mr. John Paton: Has any protest been made to the United States Government about the use of unilateral action of this kind, since no question of urgency can possibly arise on this subject?

Mr. Mayhew: It is not a question of a decision by the United States Government. They have merely put forward proposals which are now before the Far Eastern Commission.

Mr. W. Fletcher: In arriving at a decision will the Minister take into account the large quantities of material from British sources that were found in Japan and shipped to America, representing many tens of millions of dollars?

Communist Broadcast

Mr. Langford-Holt: asked the Secretary of State for Foreign Affairs what steps he has taken as a result of the Chinese Communist official broadcast to the effect that the British Government are following an anti-Chinese policy, constituting a challenge to the Chinese people which would certainly lead to grave consequences.

Mr. Mayhew: Our policy is to maintain the friendliest possible relations with the Chinese people, and I should like to take this opportunity of making it clear that the statement that the policy of His Majesty's Government is anti-Chinese is the reverse of the truth.

Mr. Langford-Holt: Is the Minister aware that this report which was broadcast by the B.B.C. was withdrawn after only one broadcast? Does he agree that it is highly undesirable to maintain any secrecy over the attitude of foreign Governments or peoples to our foreign policy.

Mr. Mayhew: I should like to look into that matter.

Oral Answers to Questions — ARAB REFUGEES (RELIEF)

Mr. Pickthorn: asked the Secretary of State for Foreign Affairs how much money from the donations to the Mediator's first relief project and to the United Nations Relief for Palestine Refugees has so far been spent on Arab refugees from Palestine.

Mr. Mayhew: The total cash expenditure up to the end of May amounted to the equivalent of £1,924,500. In addition, donations in kind have been received and distributed.

Mr. Pickthorn: Have the United Nations, as responsible for these charitable efforts, been asked by His Majesty's Government to consider what claims, under international law or practice, there may be against the Israeli Government for the help of these expatriates?

Mr. Mayhew: That has not been considered and it has not been done by His Majesty's Government. Perhaps the hon. Gentleman will put a question down.

Mr. F. Noel-Baker: What proportion of the money so far spent on the relief of Palestine Arab refugees has been provided by the United Nations International Children's Emergency Fund?

Mr. Mayhew: I could not say the precise proportion.

Oral Answers to Questions — GREECE (ABDUCTED CHILDREN)

Mr. Pickthorn: asked the Secretary of State for Foreign Affairs what recent reports His Majesty's Government have had from the British representative on the United Nations Special Committee on the Balkans about the abduction by Communists of Greek children; how many such abductions have occurred; how many of the children are known to be in Yugoslavia; and what action His Majesty's Government have taken, and are taking, through the United Nations, to trace and to arrange for the return of abducted children.

Mr. Mayhew: We have had no recent report from this body. The total number of abductions is not accurately known though the Greek Red Cross puts it at


25,000. Five thousand children are believed to be in Yugoslavia. His Majesty's Government consider that the work of tracing and arranging for the return of these children is best left to the International Committee of the Red Cross and League of Red Cross Societies, to whom the task has been entrusted under the Assembly's resolution of 27th November last. His Majesty's Government are ready to support their efforts whenever required.

Mr. Pickthorn: Does that answer mean that there has been no communication either from the British Government or from the United Nations to the Yugoslav Government on this subject?

Mr. Mayhew: I do not think there have been direct communications but the Red Cross Societies have now visited Yugoslavia.

Mr. F. Noel-Baker: Is the Minister aware that the figure given of abductions to Yugoslavia is an under-estimate and that I was personally informed with some pride by an official of the Yugoslav Government some time ago that 9,000 Greek children had been kidnapped and were now kept in Yugoslavia?

Mr. Mayhew: I could not vouch for the accuracy of the figure, but I believe it to be accurate.

Mr. Kenneth Lindsay: Does that mean that the United Nations Committee has no knowledge that any child has been traced or sent back or where these abducted children are? The Minister has said that the Red Cross have made an investigation; has any child yet been returned?

Mr. Mayhew: I said that they have made an investigation. We have an interim report but we shall get a great deal more information. We are awaiting still further reports from the Red Cross.

Mr. H. Strauss: Since the abduction and retention of these children are among the greatest of all the atrocities that have been committed, would it not be right to bear that fact in mind in negotiating any agreement whatsoever with any of the countries concerned in the matter?

Mr. Piratin: Is it not the case that these children were evacuated—[An HON.

MEMBER: "No."]—from an area where Greek bombers were bombing civilians and where the children had to be taken care of?

Mr. F. Noel-Baker: On a point of Order, Mr. Speaker. Is it in Order for an hon. Member to describe another hon. Member—in this case myself—as a robber of peasants and to do so in a very audible voice?

Mr. Speaker: It sounds to me improper, but I did not hear the remark.

Oral Answers to Questions — HOLY PLACES, JERUSALEM

Sir Patrick Hannon: asked the Secretary of State for Foreign Affairs if he has received a recent report on the present condition of the Holy Places in Jerusalem; and if he will continue to press for the establishment of an international administration of Jerusalem and Bethlehem.

Mr. Mayhew: The Conciliation Commission have not yet issued any report on the state of the Holy Places. My right hon. Friend has had no reports of a deterioration in their condition. His Majesty's Government continue to support the proposal for the internationalisation of the whole area of Jerusalem as laid down by the United Nations.

Sir P. Hannon: Is the Under-Secretary of State aware of the anxiety prevailing throughout the Christian world in regard to the Holy Places, and will he as far as possible accelerate the Commission's coming to a conclusion?

Mr. Mayhew: I cannot undertake to do what was asked in the last part of that supplementary question but I think the concern felt in this country has been well expressed by the Lord Chancellor in another place.

Dr. Segal: Is the Minister aware that many of these Holy Places are under Eastern Christian Churches? As some of these Holy Places are owned by Eastern Christian Churches, does the Minister approve or disapprove of the participation of Russia and the Eastern European countries in this international administration?

Oral Answers to Questions — CZECHOSLOVAKIA (RELIGIOUS FREEDOM)

Sir P. Hannon: asked the Secretary of State for Foreign Affairs if he will suspend the current negotiations for a trade treaty between this country and Czechoslovakia, in view of the public disapproval in this country of the lack of religious freedom accorded to Czechoslovak citizens.

Mr. Logan: asked the Secretary of State for Foreign Affairs if he is aware of the restrictions placed upon Archbishop Beran and religious liberty in Czechoslovakia; and if he is prepared to suspend trade negotiations with that country until religious liberty is restored.

Mr. Mayhew: No, Sir. His Majesty's Government are not prepared to suspend these negotiations on political grounds.

Sir P. Hannon: Are His Majesty's Government aware of the intense concern prevailing in Christian communities with regard to the treatment of distinguished ecclesiastics in Czechoslovakia?

Mr. Mayhew: We have made known our detestation of persecution everywhere. We have made our views well-known, but we cannot trade only with countries of whose politics we approve.

Mr. Logan: Are we to understand from the Government, in view of the persecution that is going on in godless nations, that they are not considering making some protests? Have they forgotten their English history, especially under Mr. Gladstone?

Mr. Wilson Harris: Will the Minister undertake that the trade treaty will not be carried through until there is some satisfactory arrangement with Czechoslovakia about her indebtedness to this country?

Mr. Mayhew: It is not the policy of His Majesty's Government to use economic weapons in that way.

Mr. Gallacher: Is it not most undesirable to make a bargaining factor of religion in trade relationships? Is it not the case that questions of religion have never been raised at any time in connection with trade with Franco Spain?

Vice-Admiral Taylor: Is not the Minister aware that this persecution in

Czechoslovakia is only a continuation of the general persecution of religion in Eastern Europe.

Mr. W. Fletcher: In view of the very woolly nature of the Minister's reply and the statement he has made about the use of the economic weapon, I beg to give notice that I will raise this matter at an early date.

Oral Answers to Questions — NORTH ATLANTIC TREATY (RATIFICATION)

Mr. Thurtle: asked the Secretary of State for Foreign Affairs how many of the signatories of the North Atlantic Treaty have now ratified this instrument.

Mr. Mayhew: The United Kingdom, Canada and Belgium have deposited their Instruments of Ratification in Washington. Luxembourg has ratified the Treaty and its Instrument of Ratification is expected to be deposited shortly.

Oral Answers to Questions — COMMERCIAL TREATIES (HANDBOOK)

Sir John Mellor: asked the Secretary of State for Foreign Affairs when he proposes to publish a new edition of the Handbook of Commercial Treaties to replace the last edition published in 1931.

Mr. Mayhew: Some existing treaties and agreements are due to be revised; and some new ones are expected to be concluded; and my right hon. Friend consequently feels that it is not a good moment to bring out a new edition.

Sir J. Mellor: Is not the last edition now quite useless?

Mr. Mayhew: It still has some use, I am told. It is a question of the best moment to bring out a new edition. We do not regard the present time as opportune.

LOCAL GOVERNMENT BOUNDARIES

The Minister of Health (Mr. Aneurin Bevan): With permission, I wish to make a statement on the Local Government Boundary Commission.
I am sure that the House will share the views of the Government that we are all very much indebted to the Local


Government Boundary Commission under the able chairmanship of Sir Malcolm Eve for the valuable reports which they have prepared and for the thorough manner in which they have applied themselves to their duties. At the same time, the Commission are under the difficulty that the Local Government (Boundary Commission) Act, 1945, from which they derive their powers, limits their operations to the review and alteration of local government areas, and they have no power to alter the structure of local government or to vary the functions of different classes of authority. The Commission, in their annual reports, have drawn attention to the disadvantages of these limitations. The White Paper on Local Government published by the Coalition Government in January, 1945, which recommended the setting up of the Local Government Boundary Commission, recognised that the machinery for local government reorganisation might have to be changed with changes ii circumstances; and the alterations in the functions of local authorities effected since the Act of 1945 have undoubtedly changed the position.
The Government have come to the conclusion that, in present conditions, it is difficult for the Commission to proceed with their work and they have accordingly decided to repeal the Act of 1945, which will involve the winding up of the Commission. This will restore the position substantially to what it was before the passing of that Act, until such time as the Government have had an opportunity of reviewing the structure and functions of local government.

Lieut.-Colonel Elliot: The Opposition certainly desire to join in the tribute paid by the right hon. Gentleman to the work of the Commission and its distinguished Chairman. What has been announced is, of course, a far-reaching decision, and we should require to give it full consideration. Meanwhile, can the Government give any indication when the proposed review of the structure and functions of local government will be begun?

Mr. Bevan: The review of the structure and functions of local government is a constant preoccupation of the Government, but we cannot tell when the review will fructify.

Mr. Eric Fletcher: Will my right hon. Friend assure the House that, in reconsidering the matter, the Government will take into account the desirability of appointing a commission which has power to consider the functions as well as the areas of local government?

Mr. Bevan: We have considered that matter and we have decided that a Royal Commission or any other commission is not an appropriate instrument for this purpose, as the Royal Commission itself would almost certainly reproduce in its personnel all the disagreements which exist in local government circles.

Mr. Warbey: Does the decision mean that the claims of local authorities which have been recognised as special priority cases can now only be satisfied in the immediate future by procedure through a Private Bill?

Mr. Bevan: As I said in my statement, the position has now reverted to what it was before the passing of the Local Government (Boundary Commission) Act. That means that Private Bill legislation is all that is available to local authorities who wish to secure alterations of their boundaries from Parliament. I think that they will find on examination that the Private Bill procedure is no more expensive and tedious than the procedure of the 1945 Act itself.

Mr. Keeling: Will the review cover London, which was excluded from Sir Malcolm Eve's terms of reference as it was being dealt with by another Committee under Lord Reading, which was dissolved?

Mr. Bevan: The hon. Member will no doubt be aware that we had to dissolve Lord Reading's Committee because there was unwillingness on the part of the relevant authorities to give evidence before it. A review of local authorities would have to include London areas.

Lieut.-Colonel Elliot: In view of the Minister's reference to Private Bill legislation, does it not seem more desirable than ever that he should be able to give the House and the country some indication when the review may be completed? Obviously it would affect the desire of local authorities to proceed by Private Bill legislation if an announcement were made indicating whether it


would be this year or next year. Can the right hon. Gentleman give an indication whether it will be this year or next year? In the interim period, what is likely to be the attitude of the Government towards Private Bill legislation.

Mr. Bevan: It is very doubtful indeed whether we would be able to come to an early decision on what the views of the Government are about the reorganisation of local government. Local authorities themselves should decide whether to proceed with Private Bill legislation. Where local authorities think they ought to have immediate easement, I think they ought to proceed by Private Bill procedure at once, and, where easement is necessary, we will give facilities.

Mr. Piratin: Did not all these difficulties concerning this Commission arise from the fact that this House has never really seriously considered the question of a policy on local government? Had that been done, might not the terms of reference have helped the Commission?

Mr. Bevan: That is an expression of opinion about the 1945 Act, which we are now terminating.

PERSONAL STATEMENT

Mr. Martin Lindsay: With your permission, Mr. Speaker, and that of the House, I rise to make a brief personal statement and a withdrawal.
In the course of supplementary questions on 26th May, I made some observations about a mental hospital in Birmingham, and later, when the accuracy of my remarks was questioned, I asserted that my information had come from the chairman of the hospital concerned. Further inquiries have shown me that, while the facts were precisely as I stated them to the House, the information was not supplied, as I then understood, by the chairman of that hospital. In fairness to the man concerned, I feel it only right to withdraw that statement. The error was entirely mine, and I apologise for misleading the House.

Orders of the Day — FINANCE BILL

Considered in Committee. [Progress, 23rd June.]

[MR. BOWLES in the Chair]

Clause 23.—(ABOLITION OF DUTIES.)

3.38 p.m.

Question again proposed, "That the Clause stand part of the Bill."

Question put, and agreed to.

Clause ordered to stand part of the Bill.

Mr. Assheton: Mr. Assheton (City of London) rose——

The Deputy-Chairman: I had collected the voices. I am afraid that the right hon. Gentleman is now too late. I am sorry.

Mr. Oliver Stanley: On a point of Order, Mr. Bowles. There was a very great noise going on and really it was quite impossible to hear.

The Deputy-Chairman: I put the Question, and I waited quite a long time and looked round the Chamber. With great respect, I do not propose to enter into an argument.

Mr. Assheton: May I say, Mr. Bowles, that I only wanted to make a suggestion to you as to how the Debate might be conducted, and I wonder if you will allow me just to put my suggestions to you at the present moment. Clause 23 is a Clause which abolishes certain existing duties. That abolition cannot really be conveniently discussed by itself but is part of a larger proposal which is perhaps more appropriately dealt with when we come to Clause 24. All I would have sought to say had I been lucky enough to catch your eye on Clause 23, was that it must not be thought that because we accepted Clause 23 without dividing against it, we accepted the principle which that Clause appears to put forward.

Clause 24.—(INCREASE IN ESTATE DUTY AND MODIFICATION OF PROVISIONS RELATED TO LEGACY OR SUCCESSION DUTY.)

Mr. R. A. Butler: I beg to move, in page 16, line 33, to leave out "forty-five," and to insert "fifty-five."
The object of this Amendment is to deal with rates of duty upon agricultural land passing at death. Therefore it is an important matter to the agricultural industry upon which we are depending so much for our food production today. We attach the greatest possible importance to this Amendment, the object of which is to restore the position and to give agricultural land the same sort of relief which the predecessor of the right hon. and learned Gentleman retained during his period of office. This Chancellor is more unfriendly to agricultural land seemingly than his predecessor, because his proposals for what he regarded as a modest rise have resulted in a further burden being placed on agricultural land.
It is important that a Government which asks an industry to make sacrifices and undertake further liabilities should increase the duties upon agricultural land passing at death. I would remind the Chancellor that agricultural land and agricultural landlords have a great liability under the Agriculture Act, 1947. We pointed this out in the course of the passage of that Act. We pointed out that capital was expected to flow into the agricultural industry at a great rate every year at the request of the Government, and landlords in putting capital into their land were doing only what the Government had asked them to do. Perhaps the Chancellor would give me a little attention because the agricultural industry is an important one and the landowning community of this country is attempting to do its best at the request of the Government.
I was saying that there was a contract, or that there should have been a contract, between the Government and the landowning community because it is evidently supposed from the terms of the Agriculture Act, 1947, that some £25 million of capital are to be put into agricultural land during the coming year, and some £30 million in the year after, with a view to financing operations under that Act. Further, in this partnership about which we heard so much from the Minister of Agriculture during the passage of the Agriculture Bill, it was laid as a definite duty upon landowners, with penalties attached, they they should so maintain their estates by the introduction

of capital that they were able to maintain the buildings and conduct good estate management.
It seems to us, therefore, particularly unfair that after entering into a contract—which I honestly believe the landowning section of the country has tried to observe, of improving estates and putting forward large sums of capital to reform estates—the Chancellor should now come along and attempt by Death Duties to do away with much of the good the landowners are trying to do by investing their capital in the land. I hope, therefore, that the Chancellor will address himself to what we regard as a question of contract, and will explain why in his Budget he is now putting an extra burden upon the agricultural industry by this steep rise in duties on certain agricultural estates.
Now leaving aside the question of contract, and looking forward to hearing the answer of the Government on that matter, I should like to draw attention to the incidence of the new duties. We do not complain about the incidence of this duty on an estate of about £40,000 in value. May I say it is easy to reach these figures with modern equipment on the land, modern dairies and everything else. It is however, upon the medium-sized estates between £40,000 and £100,000 in value that the incidence of this duty is particularly severe. If we take an estate of £100,000 in value, we find that the pre-Budget duty was approximately 15.7 per cent. and that the duty now amounts to 27.5 per cent., which is a considerable increase upon an estate of £100,000 in value. This, therefore, will impose upon the medium and larger estates, but not so much upon the smaller estates, a distinct extra burden.
Now the Government may say that owners have plenty of money and that there is no difficulty in finding capital for the land. I can only say, as one who is associated with agriculture in various parts of the country and has always taken an interest in this respect, that one of the greatest problems in the agriculture industry today is shortage of capital. That affects not only the landowners but also the country, because it deprives the workers of the best equipment and also makes it more difficult to attract labour to the land. Frankly, the only reason why we have been attracting and keeping the young men on the land is partly


the order which keeps them there, and partly the much better schools which make their lives more worthwhile and easier.
3.45 p.m.
All of us who look to a great future for agricultural England attach the greatest importance to the introduction of capital into the industry so that conditions for workers on the land may be improved, and so that we may retain on the land the best type of young workers who may grow up and enjoy a useful and attractive life there. That can happen only if capital is brought into the industry, and I can say from my modest experience that there is a shortage of capital for the land. If we look at certain figures we see from the loans granted by the Agricultural Mortgage Corporation and by the Land Improvement Company that although we are still less than halfway through the year, the loans granted and in course of completion in 1949 by the Agricultural Mortgage Corporation exceed the total loans granted in 1948 by some 70 per cent. In the case of the Lands Improvement Company, the increase is of the nature of 200 per cent. That means that owners of land are finding it increasingly difficult to put capital into the industry without recourse to these operations, and it is some indication of the difficulties we are facing in attracting capital to the land.
For these reasons, and for many others I could adduce, it is most important that the Chancellor should give us some concession upon this matter. I shall not stress unduly the sentimental side of the question because under the arrangement suggested by my right hon. Friend the Member for the City of London (Mr. Assheton) we want to raise the question of Death Duties on perhaps the next Amendment or on the Question "That the Clause stand part of the Bill." I am dealing with the specific matter of the rates of duty on agricultural land but, on the sentimental side, and looking at that side from a practical angle, it is sad to feel that this Chancellor should have been obliged—let us look at it in the best possible light—for the sake of getting what I believe will be only a small contribution to his Budget—something perhaps in the neighbourhood of £300,000—to put an additional burden upon the agricultural industry at

a time when the right hon. and learned Gentleman and his hon. Friends have been deliberately trying to encourage that industry to produce more.
I do not think this move will be welcomed in the countryside. The owners of property take a pride in their achievement. They take a pride in being able to pass on their business—because that is what modern agriculture is—to their children and families, and there is no doubt that this extra duty will make that increasingly difficult. This is a great pity for the sake of the countryside and for the sake of the traditions which have grown up in the countryside. I hope, therefore, that the Government will give this matter not only what is called in official parlance "sympathetic consideration," but will do something to relieve the burden.
The Government have said from time to time that it is in their interest to enlist the support of the agricultural industry. I can assure them that this increase of Death Duties on agricultural land passing at death has attracted the widespread attention not only of organised bodies and associations in the countryside but also of individual owners. I come from the County of Essex which has more owner-occupiers in it than any other county if one looks at the modern Domesday Book. I have always welcomed this development because I believe the owner-occupier movement is an extremely healthy one and, with the tying up of the tenancy system under the 1947 Act to such a degree, there is everything to be gained, in encouraging owner-occupiership.
I believe owner-occupiers have a great deal to contribute, not only to the industry but also to the prosperity of England. This proposal has removed from many of these people much confidence that they had placed, perhaps inadvisedly, in the belief that the Government were intending to encourage the agricultural industry at all costs. It has caused considerable consternation and depression, and I do not think that the Chancellor, in trying to squeeze this extra money out of the industry, has done a good turn to our countryside or to our agriculture.
I have one final argument. It may be said by the Chancellor, or by whoever winds up the discussion, that it is all very


well, but the smaller people do not bear the burden. That is true of an estate worth £40,000, but above that figure, which comprises many of the owner-occupiers of whom I am talking, the burden is very considerably and steeply increased. It is madness to use arguments of that sort in relation to the agricultural industry. Supposing that our interest on all sides of the Committee is in better conditions for the workers; that we want to produce more from the land, on which, I think, we can all agree; and that we want our agricultural industry to compete with overseas and help the Chancellor bridge the dollar gap; from whichever angle we look at it—the workers, efficiency or any other—there is no doubt that the larger agricultural unit in Great Britain is the more efficient. That applies to working conditions; it applies to the opportunities offered for advancement to workers as much as it does to efficiency.
If ever any legislation of this country is to be directed towards a parcellation of the land for what are called social reasons, I am very sorry to say that that will result in a slump in production and in less efficiency in the agricultural industry. Personally, I prefer the smaller unit—it is more homely, friendly and easy to control—but there is no doubt that the bodies concerned with this matter have taken the view officially, and not on the basis of political arguments—of which we have already heard quite enough on this Bill—that the larger unit is on the whole more efficient. It is the larger unit which will be hit by the proposals of the Chancellor.
I have attempted to put these points without, perhaps, all that regard to propaganda and beating the big drum which seems to have been so much a feature of our Finance Bill Debates hitherto. I hope that the Chancellor will address his mind seriously to these arguments and will give us an answer which will reassure the agricultural industry and attempt to relieve this burden.

Mr. Benson: I hardly think that the Opposition are wise in putting down this Amendment because, for the first time for many years, they have drawn attention to the extraordinary discrepancy there is and always has been in the incidence of Death Duties upon industrial capital and upon agricultural

land. A very large number of people do not know that that discrepancy exists, and they would have been very much wiser to count their blessings as represented by the 45 per cent. differentiation of which they gain the benefit. The right hon. Member for Saffron Walden (Mr. R. A. Butler) has tried to make out that this increased tax is a burden upon the agricultural industry. It is not—it is a burden upon the landowner, and upon nobody else. If Death Duties are a burden upon agriculture, they are a burden upon every form of industry. Why does not the right hon. Member for the City of London (Mr. Assheton) come all out and, instead of attempting to differentiate between agriculture and industry, move for a reduction of the whole of it?

Mr. Assheton: Mr. Assheton indicated assent.

Mr. Benson: That is not what the Amendment does, nor does any later Amendment suggest that agricultural land could be put upon the same basis as industrial capital. What we are now discussing is whether there is any justification whatsoever for a differentiation. Frankly, nothing that the right hon. Member for Saffron Walden has said has given even any colour of a case for it.
The right hon. Gentleman said that landlords were already finding difficulty in pouring back capital. That may be true; but he also gave most interesting figures to show that there are alternative sources of capital. There is the Agricultural Mortgage Corporation, which in the first six months of this year, as he said, had lent 70 per cent. more than in the whole of last year, and the Land Improvement Company, which this year has already lent two or three times as much as in the first six months of last year. It is quite obvious that there is available capital elsewhere.

Vice-Admiral Taylor: It has to be borrowed.

Mr. Benson: It does not matter whether it is borrowed or not. The proposal is that the Government shall put 55 per cent. of the Death Duties back into the land or, at least, give the landlord the opportunity of putting 55 per cent. of the normal Death Duties back into the land if he wishes to do so. That is all the Amendment proposes to do. If industry


wants capital it has to borrow it. Why should not agriculture be put on exactly the same footing? If the landlord cannot find the money, then somebody else will have to find it, but there is no earthly reason for treating the landlords differently from any industrial capitalist. Agriculture is important, as the right hon. Gentleman emphasised. So is cotton, and steel, and everything else. All our industries are important. Agriculture is not more important than the rest of them. Even though it is on a par with them, there is certainly nothing in the state of agriculture which justifies this extraordinary differentiation.
The right hon. Gentleman said that they were prepared to accept without criticism the scale of charges up to about £40,000. But if he takes a farm worth £40,000, what is he taking? If it is excellent land worth £100 an acre, its acreage would be 400; if it is normal land it may have an acreage of anything up to 1,000. The number of farms in this country of over 400 acres is practically negligible. This is not a tax upon the working farmer, because there are practically no working farmers who own farms of 400 to 1,000 acres. It is a tax upon the landowner, and nothing more.
If the right hon. Gentleman is really honest when he says that he likes the smaller unit; that he would like—I do not know whether I am interpreting him correctly—to see the land broken down into smaller ownerships, this tax will help him. It will not hit the small owner. It will hit the large landowner who owns tens of thousands of acres. If the right hon. Gentleman really wants to see the land broken up then he should support tax equality with industry.

Mr. Charles Williams: I thank the hon. Member for Chesterfield (Mr. Benson). First, he advised my party that this was an unwise Amendment because it drew attention to unfairness. I have never thought that, although it may be unwise, it is wrong to draw attention to something a change in which may do good to the country as a whole. What the hon. Gentleman has done to incur my personal thanks is that he has undoubtedly strengthened the case very strongly indeed against the imposition of Death Duties as a whole; but I could not, of course, follow him upon that point. He has made a remarkable, interesting and quotable speech of the folly of this form of tax.
4.0 p.m.
I wish to add to the illustrations given by my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler), the great necessity for increasing money which goes into land. I understand that the Chancellor of the Exchequer has been having some difficulty in the last few days, not in this country but elsewhere, because of costs. Costs are getting very big and they are bearing heavily on the cost of land. Suppose it is desired to re-equip a considerable number of farms for milking purposes, which is most essential for the health of the people. I do not think the Chancellor has any objection to the production of clean milk. An estate rather larger than the £40,000 limit, which has been mentioned several times, would without any doubt have great difficulty in raising enough money for increasing agricultural production of this kind. Everything in the way of buildings, barns or drainage or development would cause heavy costs.
On the one hand, the Government are making big grants, for drainage, for instance, very deliberately and wisely pouring the taxpayers' money into land, but on the other side they drag it out. It does not seem sensible to do everything to get people to develop their land and then, when they have developed it, to have a system of taxation which withdraws immense sums of capital in other ways. I notice that the Chancellor of the Exchequer treats this matter in a rather lighthearted way, and I regret that he should do so as there can be no question of laughter in this matter.
Unless we can attract money to the land on a very large scale in the immediate future, we shall be handicapping the production of the land. We cannot hope to make the land attractive unless we make farming more productive. One of the most important reasons why I advocate that this tax should not be so hard is because if we kept it low, we would encourage housing of agricultural labourers in an economical way. This is a matter of vast importance. I ask the Chancellor, remembering the difficulties he is having at present, to remember that the ordinary citizen engaged in agriculture is in precisely the same difficulty in facing an enormous rise in costs.
Throughout the whole of the West Country any help which can be given to get money back into the land in this way will be valued and will be a great incentive to increased production. No one can say that agriculturists have failed in any way to live up to what has been asked of them. I have been told again and again by workers and small farmers that the worst enemies they have had are those who take taxation out of the land by means of Death Duties. It is no use the Chancellor making nasty faces at me because I am raising a matter which is unpalatable to him. The worker knows that one cannot take money from capitalists and at the same time expect them to use the money to develop land. I regret to call attention again to the fact that this whole question, which so vitally affects food, is treated with levity by the Chancellor of the Exchequer.

The Financial Secretary to the Treasury (Mr. Glenvil Hall): My hon. Friend the Member for Chesterfield (Mr. Benson), in his contribution, put the matter in its right perspective. I agree that it is a pity from the point of view of the Opposition that attention has been drawn to the fact that agricultural property enjoys a very generous rebate of Estate Duty compared with the general run of property. Estate Duty at present levied on agricultural property is on the 1919 scale and, although successive increases have been made in the general scale since then, going very high in the upper ranges, no change has been made in regard to agriculture since 1919. It is true that agricultural property pays the full rate of Succession Duty. No doubt owing to consolidation of the duties some hon. Members opposite have been led to the view that my right hon. and learned Friend has been less than fair to agricultural interests. Of course that is not true.
In fact, under the consolidation proposed by my right hon. and learned Friend agriculture is making an overall gain. Whereas under present duties the rebate is roughly 43 per cent., they will now get a rebate of 45 per cent. The suggestion is that the rebate should be increased from 45 per cent. to 55 per cent. My right hon. and learned Friend could not agree to that for one moment. Owing to the changes made, which even out the scale, particularly in the middle

ranges, the fact that the two duties have been consolidated, and also because my right hon. and learned Friend has to raise an extra £20 million from the duties, in some instances it can be shown that on some agricultural properties the amount which will now be levied will be greater than before. Nevertheless it is true that the new incidence will not affect those which the right hon. Gentleman has in mind, the smaller estates. It will be much fairer for all concerned and will iron out anomalies and levy the burden where it should be levied, on estates more able to bear it.
The right hon. Gentleman gave instances, and I will give one or two. He indicated that estates below £10,000 were not affected. Under the present method they got no relief. An estate of £100,000 paid 14 per cent. as against the full rate of 35 per cent., a reduction of 60 per cent. in the charge. Owing to the haphazard way in which the scales grew up since 1919 there were definite anomalies which penalised the man with a small agricultural property who came within the incidence of the Death Duties. If, as I assume from what the right hon. Gentleman said, he does not desire that to happen, he should be grateful to my right hon. and learned Friend for what is now being done; because that type of estate owner is definitely being helped, and the burden has been shifted in part to those better able to bear it.
I do not wish to speak at great length on this topic because we are working against the clock, but I shall give a few figures to show how little there is in the charge which has been made. No separate record is kept by the Inland Revenue as to the actual duty levied on agricultural land by way of Estate and Succession Duty. Nevertheless it is possible to estimate pretty accurately what the amount is. At present it is estimated about £3 million per year is paid in Death Duties on agricultural land instead of £5,300,000, which would otherwise be paid if no relief was given on such land. We have consolidated those two duties, and if nothing further were done that would mean that agricultural properties, instead of paying £3 million, would pay something like £2,900,000. There is not a great difference but it would mean that the generous treatment now given to agricultural land would be even more


generous unless the Chancellor did something to redress the balance.
If the Committee agrees, as I hope it will, to the suggestion now made in this Clause, and rejects the Amendment, it will mean that something like £3,300,000 will accrue. I again remind the Committee that the amount coming in at the moment is £3 million, so that the total burden placed on the bigger estates by the proposals now being made amounts in total to £300,000. I cannot conceive of any Member of the Committee, however biased he may be, imagining that to be a crippling burden to place on the owners of large agricultural properties. If the Amendment were accepted it would reduce what was receivable from that source to £2,700,000, so there is only a difference of £300,000 between the proposal made by the right hon. Gentleman and the proposals made by my right hon. and learned Friend.

Mr. R. A. Butler: It is £600,000.

Mr. Glenvil Hall: Yes, £600,000; it is £300,000 each way. We are now getting £3 million and if my right hon. and learned Friend's proposals are accepted that figure will become £3,300,000; if the Amendment is accepted we shall receive £2,700,000. When one remembers how generously the agricultural interests are treated we ought to compliment my right hon. and learned Friend on being so generous.
The right hon. Gentleman tried to link this matter up with the Agriculture Act, 1947. If I understood him aright his thesis was that the Government had asked the agricultural interests to bring their equipment up to date. I do not know that they ought to be asked; surely it should be natural for those engaged in agriculture to want to bring their equipment up to date and to become as efficient as possible. They belong, like ourselves, to a great country, and agriculture is the basic industry of this country. They should not require spoon feeding at every turn, but I am not here to argue that one way or the other.
4.15 p.m.
I am saying that, as my hon. Friend the Member for Chesterfield pointed out, other industries have to re-equip themselves, and have to find the money for that from somewhere, and they often have to borrow it. I can find nothing wrong with the fact that agricultural

interests may now have to go to certain corporations in order to borrow money. In fact, the figures quoted by the right hon. Gentleman prove too much. They show definitely that agricultural property is a very good investment. When these people go to the market for money they find that they can raise it without any trouble, and so far as my information goes, they can raise it at rates of interest well below what other industries would have to pay. Indeed, the man with money, remembering how high the rate of Death Duty is, would be well advised to invest in agricultural property because when his estate comes to be valued he will find that duty will be payable at 45 per cent. less than in the case of another man who has other forms of property. Therefore, I ask the Committee to reject this Amendment as unreasonable and one which should not be accepted.

Mr. Mott-Radclyffe: The trouble about the right hon. Gentleman and the hon. Member for Chesterfield (Mr. Benson) is that neither of them really listened to the speech of my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler), and it would seem that neither of them has read in full the terms of the Agriculture Act, 1947. That Act places a statutory obligation upon the owners of agricultural land in a way which so far as I am aware, is not imposed upon the owner of any other form of property. There is a statutory obligation on the agricultural landowner to keep his buildings, farms and equipment up to date.
The fact remains, whether the right hon. Gentleman likes it or not, that a landowner's capital is not unlimited, and the same capital cannot be paid out in two different directions at the same time. It can either go into buildings or into the Chancellor's pocket in the form of Death Duties; it may go either in one way or the other but not in both. The right hon. Gentleman puts forward the facile argument that it is a simple operation for any agricultural landowner to borrow money from the Agricultural Mortgage Corporation or the Land Improvement Company. Of course it is, but if one borrows money one pays interest, and if one pays interest one puts a charge on the land. To carry a heavy annual rate of interest is sometimes not at all easy on marginal land.
The position which the right hon. Gentleman has taken up in asking the Committee to reject the Amendment is quite illogical. The more any agricultural landowner fulfils his obligations under the 1947 Act the more his successor is penalised. That is a ridiculous position to get into when the Chancellor and the Minister of Agriculture are continually telling the industry that the more food produced at home the greater is the amount of dollars saved. It is more often than not forgotten that sometimes the only realisable assets for Death Duties on an agricultural estate is a commodity which is in very short supply—namely timber. Perhaps the Chancellor had forgotten that point, and its implications upon timber supplies.
When the Financial Secretary tells us that the difference at stake is only a matter of £600,000–20 per cent.—he should carefully work out the number of pairs of agriculture cottages that could be built, the number of farm buildings that could be repaired and put up, the electric milking equipment that could be installed for that sum of money, and he might then have some rough idea of the damage which he is doing to the agricultural industry in asking the Committee to reject this Amendment.

Mr. Assheton: I should like to add a word to what my hon. Friend the Member for Windsor (Mr. Mott-Radclyffe) has just said, and to try to reply to some of the points made by the hon. Member for Chesterfield (Mr. Benson) as well as to some of those made by the Financial Secretary. First, I would remind the Chancellor of the words he used introducing his Budget, when he said:
I propose to substitute for the present concession on agriculture property … a new relief … of an abatement of 45 per cent. … which will produce approximately the same result by way of relief."—[OFFICIAL REPORT, 6th April, 1949; Vol. 463, c. 2096.]
I do not think the Chancellor could have studied the figures as closely as some of us have since done, or he could not reasonably have made that statement. It may well be that an additional imposition of £300,000 in total appeared to him to produce approximately the same result. Whether that is so or not, the fact is, as was pointed out by my right hon.

Friend the Member for Saffron Walden (Mr. R. A. Butler), that on all estates above £35,000 the rate of duty is very heavily increased. I hope that the Chancellor will notice that with regard to the middle ranges of estates this increase amounts to 74.5 per cent. which cannot be called a moderate levy; it is a steep and substantial increase of taxation. I therefore suggest that when he made the original suggestion he did not appreciate entirely the significance of his proposals. Perhaps he has done so since. I hope he will reconsider the arguments which have been put forward from this side of the Committee and also these proposals.
The hon. Member for Chesterfield made a number of interesting points, as he always does. He started by saying that there was no justification for the discrepancy between the charge of duty on other forms of property and on agricultural land; between industry and agriculture. I would ask him to consider these points. He is very familiar with the basis of valuation, more familiar than I am and a great many hon. Members of this Committee. He knows that when an agricultural estate is valued, it is valued on the basis of that estate being broken up. It is not valued on the basis of the rent revenue which it earns and that alone makes a tremendous difference in the total result obtained from valuation.
I am sure all hon. Members are aware of the very low return on capital which applies to the agricultural landowning industry. It is lower than any other industry in the country. Moreover, out of the rents which are received by the agricultural landowner as distinct from many other forms of rent received, a very large proportion—up to 50 per cent. in the bulk of cases—has to be put back in repairs which at the present time are exceedingly heavy and expensive. So, whereas the income of an estate which appeared to be, let us say, £1,000, would be valued when it comes to valuation more or less on that basis, the return to the owner is only half that sum. So in fact the owner of agricultural land who has to pay Death Duties has to pay a great deal more in relation to his income than is payable on any other form of property.

Mr. Benson: That is perfectly true, but the right hon. Gentleman must not forget that the purchasing value of the land depends entirely on the desire of people to own it. If there is a large multiplier for valuation purposes, that is merely the measure of the desire to own land.

Mr. Assheton: I entirely agree with the hon. Member, but that does not make it any easier for the owner of the property to find the money to pay for it. It may well be that what the hon. Member says is true. Would he say that the solution is to break up all estates into small units? I do not think that would be in the interests of agriculture.
The hon. Member said that it was not a tax on the working farmer. I agree, unless the working farmer owns a farm valued at more than £35,000. There are some who do, but not a very large number. It may not be a direct tax on the working farmer, but he feels the draught of it, because the landowner immediately has his resources very largely reduced and crippled. He cannot find the money which he might otherwise find for extensions of buildings and to pay for new cow sheds, new dairies and other things which he is being pressed to do at the present time. Nor can he easily find the money so necessary for repairs. There is no doubt therefore that the tenant farmer does feel a serious and immediate effect. Hon. Members are justified, in my opinion, in saying that it is a tax on the working farmer, because it is a tax the burden of which he feels.
The Financial Secretary talked about a generous rebate and he said that in some instances there was no increase at all. But does he appreciate that in all instances over £35,000 there is a very substantial increase? It is not a question of some fortuitous increases in the scale but there is an increase in every case where property devolves from father to son and the estate is more than £35,000. It is a substantial increase, running at the peak level at 74 per cent., which is an enormous increase, and is extremely discouraging to the owner of agricultural land. I hope

that the Chancellor will take into account some of the observations made from this side of the Committee and will reconsider the matter, and appreciate that there is more in the argument than he thought.

Mr. Walter Fletcher: There are two quite important points that arise from this. The Chancellor and the Financial Secretary seemed to be much more occupied in ironing out anomalies than in concentrating on the effect of this on the efficiency of the agricultural industry of this country. It so happens that on the larger estates affected by this matter, there take place a large proportion of the great experiments in dairy farming which can only be carried out on large herds over a fairly wide area. It is very often on just this type of farm that nearly all the important agricultural changes, such as experiments in grass drying and herd experiments, have been and can be carried out. If the right hon. and learned Gentleman wishes to have that point reinforced, perhaps on the pleasure trip he is undertaking to France the day after tomorrow, he will inquire what has happened there.
This tendency to break down the big estates has brought French agriculture to its lowest possible pitch and there is now being considered by the French Government a series of Bills with regard to the lotissement, the breaking up of the larger agricultural units, because they have been found so much more practical and efficient. This Clause to which the Amendment is being moved, does have exactly that effect of breaking down the farms on which the big-scale and long-term experiments can be carried out. I hope that the Chancellor will consider this entirely practical point which can be reinforced by any of his hon. Friends who take a practical interest in agriculture. I regret to say that it is part of the whole Socialist system of breaking down probably the most useful form of agriculture there is in this country.

Question put, "That 'forty-five' stand part of the Clause."

The Committee divided: Ayes, 217; Noes, 100.

Division No. 176.]
AYES
[4.30 p.m.


Acland, Sir Richard
Austin, H. Lewis
Barton, C.


Adams, Richard (Balham)
Awbery, S. S.
Battley, J. R.


Albu, A. H.
Ayles, W. H.
Bechervaise, A. E.


Allen, A. C. (Bosworth)
Ayrton Gould, Mrs. B.
Benson, G.


Anderson, A. (Motherwell)
Balfour, A.
Binns, J.


Attewell, H. C.
Barstow, P. G.
Blackburn, A. R.




Blyton, W. R.
Holmes, H. E. (Hemsworth)
Proctor, W. T.


Bowden, Fig. Offr. H. W.
Horabin, T. L.
Pursey, Comdr. H.


Braddock, Mrs. E. M. (L'pl. Exch'ge)
Houghton, A. L. N. D. (Sowerby)
Randall, H. E.


Braddock, T. (Mitcham)
Hoy, J.
Ranger, J.


Bramall, E. A.
Hudson, J. H. (Ealing, W.)
Reeves, J.


Brook, D. (Halifax)
Hughes, Hector (Aberdeen, N.)
Reid, T. (Swindon)


Brooks, T. J. (Rothwell)
Hughes, H. D. (W'lverh'pton, W.)
Ridealgh, Mrs. M.


Broughton, Dr. A. D. D.
Hutchinson, H. L. (Rusholme)
Robens, A.


Brown, T. J. (Ince)
Hynd, H. (Hackney, C.)
Roberts, Goronwy (Caernarvonshire)


Bruce, Maj. D. W. T.
Hynd, J. B. (Attercliffe)
Robertson, J. J. (Berwick)


Burden, T. W.
Irvine, A. J. (Liverpool)
Robinson, Kenneth (St. Pancras, N.)


Burke, W. A.
Irving, W. J. (Tottenham, N.)
Rogers, G. H. R.


Butler, H. W. (Hackney, S.)
Jay, D. P. T.
Ross, William (Kilmarnock)


Castle, Mrs. B. A.
Jeger, G. (Winchester)
Royle, C.


Chamberlain, R. A.
Jeger, Dr. S. W. (St. Pancras, S. E.)
Segal, Dr. S.


Champion, A. J.
Jenkins, R. H.
Sharp, Granville


Chater, D.
Jones, D. T. (Hartlepool)
Shurmer, P.


Chetwynd, G. R.
Jones, P. Asterley (Hitchin)
Silverman, J. (Erdington)


Cocks, F. S.
Keenan, W.
Silverman, S. S. (Nelson)


Collindridge, F.
Key, Rt. Hon. C. W.
Simmons, C. J.


Collins, V. J.
Kinghorn, Sqn.-Ldr. E.
Skeffington, A. M.


Colman, Miss G. M.
Kinley, J.
Skeffington-Lodge, T. C.


Cook, T. F.
Kirby, B. V.
Skinnard, F. W.


Corlett, Dr. J.
Leonard, W.
Smith, C. (Colchester)


Cove, W. G.
Levy, B. W.
Smith, S. H. (Hull, S. W.)


Crawley, A.
Lewis, J. (Bolton)
Snow, J. W.


Cripps, Rt. Hon. Sir S.
Lindgren, G. S.
Solley, L. J.


Crossman, R. H. S.
Lipton, Lt.-Col. M.
Sorensen, R. W.


Daines, P.
Logan, D. G.
Soskice, Rt. Hon. Sir Frank


Davies, Edward (Burslem)
Lyne, A. W.
Sparks, J. A.


Davies, Ernest (Enfield)
McAdam, W.
Stross, Dr. B.


Davies, R. J. (Westhoughton)
McAllister, G.
Stubbs, A. E.


Deer, G.
McEntee, V. La. T.
Summerskill, Rt. Hon. Edith


Delargy, H. J.
McGhee, H. G.
Taylor, R. J. (Morpeth)


Dobbie, W.
Mack, J. D.
Taylor, Dr. S. (Barnet)


Dodds, N. N.
McKay, J. (Wallsend)
Thomas, D. E. (Aberdare)


Donovan, T.
Mackay, R. W. G. (Hull, N. W.)
Thomas, George (Cardiff)


Driberg, T. E. N.
McLeavy, F.
Thomas, I. O. (Wrekin)


Dugdale, J. (W. Bromwich)
MacPherson, Malcolm (Stirling)
Thorneycroft, Harry (Clayton)


Dye, S.
Mainwaring, W. H.
Thurtle, Ernest


Evans, Albert (Islington, W.)
Mallalieu, J. P. W. (Huddersfield)
Titterington, M. F.


Evans, S. N. (Wednesbury)
Mellish, R. J.
Tolley, L.


Ewart, R.
Messer, F.
Ungoed-Thomas, L.


Farthing, W. J.
Middleton, Mrs. L.
Vernon, Maj. W. F.


Fennyhough, E.
Millington, Wing-Comdr. E. R.
Viant, S. P.


Follick, M.
Mitchison, G. R.
Wallace, G. D. (Chislehurst)


Foot, M. M.
Monstow, W.
Wallace, H. W. (Walthamstow, E.)


Forman, J. C.
Morris, P. (Swansea, W.)
Warbey, W. N.


Gallacher, W.
Morrison, Rt. Hon. H. (Lewisham, E.)
Watkins, T. E.


Gibbins, J.
Mort, D. L.
Wells, P. L. (Faversham)


Gitzean, A.
Moyle, A.
West, D. G.


Glanville, J. E. (Consett)
Murray, J. D.
Wheatley, Rt. Hon. John (Edin'gh, E.)


Grenfell, D. R.
Naylor, T. E.
White, H. (Derbyshire, N. E.)


Grey, C. F.
Meal, H. (Claycross)
Whiteley, Rt. Hon. W.


Grierson, E.
Nichol, Mrs. M. E. (Bradford, N.)
Wilkes, L.


Griffiths, D. (Rother Valley)
Noel-Baker, Capt F. E. (Brentford)
Williams, D. J. (Neath)


Griffiths, W. D. (Moss Side)
Oliver, G. H.
Williams, J. L. (Kelvingrove)


Gunter, R. J.
Orbach, M.
Williams, Ronald (Wigan)


Guy, W. H.
Paget, R. T.
Williams, Rt. Hon. T. (Don Valley)


Hall, Rt. Hon. Glenvil
Pargiter, G. A.
Williams, W. R. (Heston)


Hamilton, Lieut.-Col. R.
Parker, J.
Willis, E.


Hannan, W. (Maryhill)
Paton, Mrs. F. (Rushcliffe)
Woodburn, Rt. Hon. A.


Hardy, E. A.
Paton, J. (Norwich)
Wyatt, W.


Hastings, Dr. Somerville.
Poole, Cecil (Lichfield)
Yales, V. F.


Haworth, J.
Popplewell, E.
Young, Sir R. (Newton)


Herbison, Miss M.
Porter, E. (Warrington)



Holman, P.
Porter, G. (Leeds)
TELLERS FOR THE AYES:




Mr. Pearson and Mr. Wilkins.




NOES


Agnew, Cmdr. P. G.
Butcher, H. W.
Drayson, G. B.


Amory, D. Heathcoat
Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)
Drewe, C.


Assheton, Rt. Hon. R.
Challen, C.
Dugdale, Maj. Sir T. (Richmond)


Baldwin, A. E.
Channon, H.
Duthie, W. S.


Baxter, A. B.
Clarke, Col. R. S.
Eccles, D. M.


Beamish, Maj. T. V. H.
Conant, Maj. R. J. E.
Eden, Rt. Hon. A.


Birch, Nigel
Crookshank, Capt. Rt. Hon. H. F. C.
Elliot, Lieut.-Col. Rt. Hon. Walter


Boles, Lt.-Col. D. C. (Vells)
Crosthwaite-Eyre, Col. O. E.
Erroll, F. J.


Boothby, R.
Crowder, Capt, John E.
Fletcher, W. (Bury)


Boyd-Carpenter, J. A.
Cuthbert, W. N.
Fraser, H. C. P. (Stone)


Braithwaite, Lt.-Comdr. J. G.
Darling, Sir W. Y.
Fraser, Sir I. (Lonsdale)


Bromley-Davenport, Lt.-Col. W.
Digby, Simon Wingfield
Gammans, L. D.


Brown, W. J. (Rugby)
Dodds-Parker, A. D.
Gridley, Sir A.


Buchan-Hepburn, P. G. T.
Dower, Col. A. V. G. (Penrith)
Grimston, R. V.







Hannon, Sir P. (Moseley)
Maclean, F. H. R. (Lancaster)
Spearman, A. C. M.


Harden, J. R. E.
MacLeod, J.
Stanley, Rt. Hon. D.


Harris, F. W. (Craydon, N.)
Maitland, Comdr. J. W.
Strauss, Henry (English Universities)


Head, Brig. A. H.
Manningham-Buller, R. E.
Sutcliffe, H.


Headlam, Lieut.-Col. Rt. Hon. Sir C.
Mellor, Sir J.
Taylor, C. S. (Eastbourne)


Hinchingbrooke, Viscount
Morris, Hopkin (Carmarthen)
Taylor, Vice-Adm. E. A. (P'dd't'n, S.)


Hogg, Hon. Q.
Mott-Radclyffe, C. E.
Teeling, William


Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)
Neven-Spence, Sir B.
Thomas, Ivor (Keighley)


Hutchison, Col. J. R. (Glasgow, C.)
Nicholson, G.
Touche, G. C.


Keeling, E. H.
Noble, Comdr. A. H. P.
Turton, R. H.


Lancaster, Col. C. G.
Odey, G. W.
Watt, Sir G. S. Harvie


Lennox-Boyd, A. T.
Peto, Brig. C. H. M.
Webbe, Sir H. (Abbey)


Linstead, H. N.
Pickthorn, K.
Williams, C. (Torquay)


Lloyd, Selwyn (Wirral)
Rayner, Brig, R.
Williams, Gerald (Tonbridge)


Lucas, Major Sir J.
Reed, Sir S. (Aylesbury)
York, C.


Lucas-Tooth, Sir H.
Roberts, H. (Handsworth)
Young, Sir A. S. L. (Partick)


MacAndrew, Col. Sir C.
Roberts, W. (Cumberland, N.)



McCorquodale, Rt. Hon. M. S.
Robertson, Sir D. (Streatham)
TELLERS FOR THE NOES:


Macdonald, Sir P. (I. of Wight)
Ropner, Col. L.
Brigadier Mackeson and


McFarlane, C. S.
Ross, Sir R. D. (Londonderry)
Colonel Wheatley.


Maclay, Hon. J. S.
Smithers, Sir W.

Mr. Assheton: I beg to move, in page 16, line 33, at the end, to insert:
and where the property in respect of which estate duty is chargeable passes to persons who, save for section twenty-three of this Act, would have been liable to legacy duty or succession duty at the rate of two per cent., then on that proportion of the property passing and for the benefit of those persons there shall, without prejudice to the reduced rate applicable to agricultural values, be a further reduction of five per cent. in each of the rates.
I understand that it would be agreeable to you, Major Milner, and I hope that it would be agreeable to the Committee, if the discussion on the main proposals of the Chancellor of the Exchequer with regard to Death Duties were to take place on this Amendment.

The Chairman (Major Milner): Certainly.

Mr. Assheton: I should like to try to warn the public that everyone who has made a will ought to have a look at it, because the new proposals made by the Chancellor are most likely to have an important effect upon it. You, Sir, as a member of the legal profession, will be fully apprised of that fact, but there may be many people who do not understand what a considerable revolution has been made in the Death Duty system by these proposals. I hope that they will all take occasion to look at the wills which they have made.
The proposals of the Chancellor which are embodied in this Clause have three main effects. First, they end the present differentiation in favour of near relatives of the testator. Secondly, they greatly increase the amount payable, especially in the middle range of estates. Thirdly, they increase the duty on agricultural

land more steeply in relation to its present level than they increase the duty on any other class of property. That is the point which we have already discussed on the last Amendment, and naturally I shall not carry it any further on this occasion.
I suggest to the Committee that all these three moves which the Chancellor has made are really undesirable moves. He has put forward the proposal to abolish Legacy and Succession Duty and to concentrate all Death Duties on Estate Duty in the interests of simplification, and I am sure that all of us are always glad to look with sympathy on any proposal which simplifies the law relating either to Income Tax or Death Duties. But there are occasions when simplifications is bound to lead to what many people will think are injustices or undesirable consequences, and I think this is one of them. At the present time, in addition to Estate Duty, when estates pass there is charged a duty of 2 per cent. if the property is left to the widow and children, 10 per cent. if it is left to nephews and nieces, and 20 per cent. if it is left to a stranger; that is in addition to the substantial rate of Estate Duty which already runs up to 75 per cent.
Under the new proposals, the widow and children, the nephews and nieces and the stranger are all to pay the same rate of duty, and we on this side of the Committee think it is a very undesirable proposal, because we think that the present advantages which are conceded to the near relatives, for whom a testator is always most anxious to provide, are not only reasonable but human, civilised and very desirable in the interests of the


family, and I believe hon. Members opposite, as well as those on this side, will think it important to consider carefully the interests of the family. There was a very interesting letter in "The Times" recently emanating from the Reform Club, though not from a member of my party, but from a distinguished ex-civil servant, as a matter of fact, in which he made this statement, which puts the whole case so well:
To provide for the needs of widow and children is an elementary social duty. The above comparison shows with what unnatural and unsocial force the new scale may operate and how great is the additional inroad made on the resources available for the immediate family of the testator… It is difficult to follow the argument for a scale which leads to such results—in some cases to substantial reductions in the aggregate rate of tax applying to estates passing to outside beneficiaries, and, on the other hand, to swingeing increases in the case of estates passing to wife, husband or children.
Then he gives a table of figures to illustrate his point, and it really is very remarkable, because, on studying it more closely, I find that, in all ranges of estates up to £67,000, a stranger will obtain a substantial remission of duty under these new proposals, whereas the family man will find his estate taxed much more heavily.
If, for instance, we take an estate of £25,000 at the present moment, if it is left to the widow, the duty is just over 15 per cent., whereas if it goes to an outside relative or a stranger it is 31 per cent. Under the proposed uniform scale, there is an increase for the widow of 14 per cent., and it rises, in the case of an estate of £100,000, to an increase of 38 per cent. These are what the Chancellor has described as a "moderate lift," but I do not think he can have studied the table quite as closely at that stage as I hope he has been able to do since. Whatever those figures indicate, they are not a "moderate lift," but a very substantial increase indeed.
I should like to make one or two general observations on the subject of Death Duties. We see in the newspapers that a man has left £50,000 or £100,000, and, no doubt, to the ordinary reader, that immediately conjures up the idea of a large bank balance which is to be freely available for spending by some fortunate heir, who may or may not be related in blood to the deceased. Of what does that estate consist? First of all, it very likely

consists of the man's own house, all the furniture in it, the tables, chairs, the pictures on the walls, his mother's picture and his father's picture, the silver on his table, if he is lucky enough to have any, his motor-car, all the clothes he possesses, and so on.
4.45 p.m.
What else does it include? If he has a business, it includes his factory and all its machinery, tools, motor-cars and all the various articles of which he had to be the proprietor in order to run that particular business. Or, if he was a farmer, it includes his cows, sheep and pigs and so on. When it comes to finding the Death Duties, the Inland Revenue says "We want cash." They are not prepared to take 10 cows, the dining room table or the old motor-car; what they say is "We want cash." When we are looking at a proposition of this sort where people are subject to Estate Duty, we must realise that all these effects will have to be turned into cash before the duty can be paid.
How is the cash found? In some cases, it may be that the man was sufficiently wealthy to have a considerable amount in gilt-edged securities with which to meet such a charge, but that is by no means the ordinary case or the inevitable practice. Most people who have small businesses and some who have large ones have not got the large resources in cash from which they can face a demand of this sort, so what do they do? Some men try to prepare for the occasion in advance by selling their assets or by not extending their businesses.
I heard a story from an hon. Member here which was a personal experience, and I was interested to learn that he was a Scotsman. It concerned a man who himself owned two factories both employing between 500 and 1,000 men, and he was in course of preparing plans to build a third factory. When he heard of a substantial increase in Death Duties, he asked his accountants what it would mean to him. They told him that it would mean so many thousands of pounds, and he said, "But I have not got £30,000" (or whatever the sum was). The accountants said, "No, but your executors will have to find it when the time comes." He then said, "If that is the case, we cannot go on with the plans for the new factory, and the extension of the present factory


must be stopped. We must accumulate money with which to pay these duties when I die, because, otherwise, the business will be in difficulties. What will happen then? What will my son be faced with? Will he be faced with the prospect of closing down the factory, selling the machinery and so on?"
I think hon. Members opposite frequently consider these matters from the angle of the big industrial company which has a large number of shares on the market—shares which, when a man dies, have to be sold and can normally be sold on the market, though I understand that conditions in that respect today are very difficult. In the case of a small business or a landed estate or big farm, that is not the case. It is not capitalised in that way, and we do not have a large number of people owning marketable shares which enable the money to be found fairly quickly. The fact therefore is that these duties are a great deal more related to the ordinary life of the people than perhaps some hon. Members have been inclined to concede. They may affect very closely very humble people indeed.
Of course, there are a great many classical objections to Death Duties into which I will not go into detail now. In the first place, the most obvious one is that the country is living on capital, because we are spending, or did spend last year, £172 million of capital by way of income; that is to say, £172 million were being put into the hands of the Exchequer and the Chancellor was spending that £172 million as annual revenue. I know it can be argued that the people who bought the deceased's property bought it out of savings, and that, therefore, there has been no destruction of capital. But, of course, that is a false argument, because the £172 million would have been there to establish new capital had it not been used in that particular way. That being so, the community is undoubtedly living on its capital in so far as it uses Death Duties to finance its current expenditure. I do not think that can be controverted.
Then, of course, it is quite clear that it has a distinct disincentive effect on saving, and that, I think, has been more apparent in recent years than ever before. We have a situation in which capital is now being spent which, but for excessive Death Duties, might not be spent.

The Committee ought not to forget the very grave hardship on the breadwinner. Take a man who has built up his own business and established a substantial position. He might, perhaps, be earning what would be considered a good income and have struggled to put aside out of that income a certain amount of money to provide for his widow and children. We know how difficult it is to put aside money at the present time owing to the very high rate of taxation, and that the tax on a big income is so high that it is difficult to save anything at all. The highest kind of income which an individual can now receive does not conduce to very substantial saving.
Take such a man who has succeeded in the course of his life in making some substantial savings, and who then dies. Perhaps he dies sooner than he expected—he may die in the prime of life—but at the very moment when the breadwinner is removed and is no longer able to provide money with which to support his wife and children, the State comes down on his dependants for this money. These rates of Death Duties go up to extraordinarily steep levels. In some cases they are as high as 80 per cent., and even on an estate of £100,000 they are 50 per cent. That does not seem to me a very sensible way of going on. To begin with, we are using the capital resources as income, and, secondly, we are imposing a very heavy burden on a family just at the moment when its members are probably least able to bear it.
I shall not take the opportunity now of deploying many of the other arguments that exist. There are a great many detailed arguments dealing with the question of aggregation which cause special hardship in relation to Death Duties, but in view of the arrangement we made with the Treasury Bench the other night, I should like to put off the development of these particular arguments until some future occasion. The particular Amendment on which I have hung the observations I have made proposes, in some degree, to remedy the blow which the Chancellor of the Exchequer has struck by removing the differentiation in favour of the family. We have inserted a proviso in the Amendment to the effect that, in the case of property left to a widow or a child, there shall be a further reduction of 5 per cent. I think that is a very


moderate and reasonable proposal, and I hope that the Government will concede it.

Colonel Dower: I rise to support this Amendment. I do not propose to add much to the arguments already put forward by my right hon. Friend against these tremendously high Death Duties because the wasting of time by repetition is not my object. However, I think that the Government are under an obligation to this Committee to state quite clearly why they have removed the privilege and precedence of the family in connection with the question of Estate Duty. I think we are entitled to know why that has been done. A step has been taken which will be injurious to widows and children when this Bill becomes an Act, and we are entitled to know what are the arguments in support of this action, and why it has been taken.
During the last 12 months, I have been in many of the Colonies and in many foreign countries, and in nearly every one of them a privilege is extended to widows and children in connection with Estate Duty. For instance, in South Africa, when a man dies, not a penny in Death Duties is charged upon the estate which goes to the widow. The widow takes the estate complete, and it is not until she dies that the full charge of Death Duties is levied upon the estate. I am not saying that the South Africans are more enlightened than we are, or vice versa, but we all come from the same group of nations and we are all part of the British Commonwealth of Nations. The fact remains that in one part of the Commonwealth the widow does not have to pay a single penny in Death Duties while in this country we have a Government who say that she is to be treated just as if she were a stranger or a casual acquaintance of the deceased. Without labouring that particular point any more, I hope that the Solicitor-General will make it clear to the Committee why this has been done.

The Solicitor-General (Sir Frank Soskice): The right hon. Gentleman the junior Member for the City of London (Mr. Assheton) who moved this Amendment and the hon. and gallant Member for Penrith and Cockermouth (Colonel Dower) who supported it really advanced arguments which I thought fell into two

separate categories. The one category of argument, namely, that which related to the hardship on the breadwinner whose estate had to pay Death Duties just at a time when it might be most difficult to do so were really arguments against the incidence of Estate Duties at all. Once Estate Duty becomes an institution of this country, none of those particular arguments, as far as I can see, have any especial validity to the change we are now making. Either Estate Duty is wrong or it is right. If it is right that Estate Duty should be charged, then it is no good complaining that a breadwinner who is earning a good income is treated harshly in that at the very moment when his family is left Estate Duty is charged in cash. Those are general arguments and are relevant, perhaps, to the increase as distinct from the form of the duty. My right hon. and learned Friend the Chancellor of the Exchequer has made it clear that he feels that the requirements of the country need a further increment of some £20 million from Death Duties. Those moneys are to be collected by an increase in duty on estates in excess of £35,000.
The second category of argument related to the way in which the family was affected by this new change. I believe that everybody in the Committee is sympathetic towards the desire of the Government to simplify the incidence of these duties. In their present form they are really most illogical and most inconvenient to everybody. An estate becomes liable to Estate Duty upon the death of a particular person, but after Estate Duty is paid, and it is thought by the ordinary person that everything is cleared up, Succession Duty or Legacy Duty, as the case may be, has to be paid in addition. It produces a great deal of complication, both from the point of view of beneficiaries, accountants, solicitors, and everybody else. The main object of abolishing Legacy and Succession Duties is to simplify the state of the law, and to make it fit more closely into actual life.
5.0 p.m.
The question, therefore, is whether the change which we have proposed operates in an undesirable way. It is said by hon. Members opposite that it does because it unfairly affects close relatives; that is to say, that it falls too heavily on wives and children. In reply to that, I would say


that there are other considerations which the Committee should take into account. It is extremely difficult at the moment to justify the present incidence of Legacy Duty and Succession Duty, and I will try to give some reasons why. Take, for example, a large estate the residue of which goes to the son. It might be half a million pounds. The testator may have made provision for, say, an aged aunt or aged and impoverished relatives who are entirely dependent upon him and have no other means of support. I do not know what is the experience of other hon. Members, but I should have thought that in the case of large estates, normally the residue goes to the children and the estate makes provision for servants, relatives, charities and for a number of purposes of that sort.
As the matter stands at present, it works out in this way. As I said, the residue may be half a million pounds. That goes to the son and the son pays on that sum 2 per cent. Legacy Duty. Now let us take the aged aunt who may have been given a legacy of, say, £1,000 or £2,000 simply in order to assist her, she having no other means of support. It is really indefensible that she should have to pay 20 per cent. on that legacy, whereas the son who gets the whole of the residue of half a million pounds should only have to pay 2 per cent. That seems to us an entirely illogical position; not only that, but it seems extremely harsh. The person who desperately needs the money in that case is not the son who has got his life before him and who can earn his own living, but the relative who is dependent upon the legacy of £1,000 or £2,000 which she may have been left in order to assist her.

Sir Hugh Lucas-Tooth: Is not the right hon. and learned Gentleman aware that in every well drawn will the Legacy Duty on such a legacy as he has described is drawn on the residue?

The Solicitor-General: I am very well aware of that, and that is the case with regard to two out of three wills. That is the next point to which I wish to come. Two out of three testators who leave their money under terms of testamentary dispositions which they have executed provide that in the case of that sort the legacy shall be free of Legacy

Duty to the beneficiary. What the present law requires one to do is, not withstanding that the testator has intimated as his desire that the relative shall have her legacy free of duty, we, in enforcing the present law, go contrary to his wish and carve the Legacy Duty out of the residue of the estate. That is the second point which I desire to make in asking the Committee to agree that the present state of the law is completely and utterly irrational. It is perfectly absurd that when the testator has said that he wishes the legacy to be free of Legacy Duty, the law should then say, "Oh, well, never mind; contrary to the expression of his wish, we are going to carve a fresh Legacy Duty out of the residue of the estate." That is what is done, and in our view it is completely indefensible.
A third consideration, and one which I think is of importance, is this. Legacy Duty and Succession Duty at the moment fall far more heavily upon small estates than upon rich estates. Take a case, for example, of an estate of £6,000 left to brothers who pay Legacy Duty at the rate of 10 per cent. The rate of Estate Duty would be 3 per cent., and then Legacy Duty is paid by the brothers on the benefit which they derive at the rate of 10 per cent. That represents mathematically a gross payment approaching 13 per cent. on the total of the £6,000 estate. I say "approaching" and not actually 13 per cent., because first 3 per cent. is charged on the total amount and then 10 per cent. is charged upon the balance, but it approaches 13 per cent.
Suppose it is a fairly big estate of, say, £3 million. I am taking a very big estate in order to illustrate the point I am trying to make. Under the present scale—that is to say, before the alteration which we are seeking in this Bill to make—the Estate Duty is 75 per cent.; assume it is left to brothers and they have to pay 10 per cent. on the legacy left to them. The total amount paid is 77½ per cent. Whereas we have an increase of from 3 per cent. to 13 per cent. in the case of an estate of £6,000, with a big estate—an estate charged at the rate of 75 per cent. which is the rate charged on estates over £2 million—the increase is 2½ per cent. That is another reason why the present rate of Legacy Duty is indefensible. It falls much more


heavily upon small estates than on large estates.
What is the change that we have made? It is not easy in cases of these duties to devise a system which is absolutely beyond criticism from every point of view. What is the position with regard to wives and children under the new system which we are seeking to introduce by this Bill? On estates not exceeding £15,000, under the existing law wives and children pay no Legacy Duty. That position is being preserved, in this sense that under the new rates which we are introducing in the Schedule to this Bill the total Estate Duty chargeable on estates up to £17,500, which now incorporates Legacy and Succession Duty, is the same as the present existing Estate Duty. In other words, what we have done in the case of estates up to £17,500 is that we have virtually washed out Legacy Duty and Succession Duty. It is exactly the same. All wives and children, who at the present rate pay no Legacy or Succession Duty on estates up to £15,000, will be in exactly the same position; they will not have to pay one penny more. In point of fact, they will pay rather less, in that they are advantaged in the case of estates between £15,000 and £17,500.
As I say, the rate is still the same as the old Estate Duty rate was, although with an estate over £15,000 at the present rate wives and children will have to pay 2 per cent. In the case of that narrow margin between £15,000 and £17,500, whereas under the existing law wives and children pay 2 per cent., under the new system they will simply pay the equivalent of the existing Estate Duty without the addition of Legacy Duty or Succession Duty. With regard to estates between £17,500 and £35,000 the new combined Duty is not increased. It is the equivalent—I do not say it is exactly, because it cannot be worked out exactly—of the average of the three duties—Estate Duty, Legacy Duty and Succession Duty—under the existing law.
The right hon. Member for the City of London (Mr. Assheton) said that the matter bore hardly particularly on the small person or the moderate estate. That really is not true. Take the case of a wife and child. I have already said that in the case of estates up to £17,500 they

pay no more, and indeed with estates of above £15,000 and under £17,500 they pay less. I think I am right in saying that some 550,000 persons die every year, and only 1 to 2 per cent. of those persons who die leave estates over £17,500. All the rest leave estates under £17,500.
Therefore, in 98 per cent. to 99 per cent. of the cases of deaths which at present take place, wives and children pay no more, and indeed in the particular band of estates between £15,000 and £17,500 they pay less. In point of fact, one must remember that the total yield from the Legacy Duty and the Succession Duty charged at the present moment is only some 10 per cent. of the total yield of Death Duties. The rest is accounted for by Estate Duty. The present differentiation, therefore, relates to only about one-tenth overall. In the case, therefore, of 98 to 99 per cent. of the families in this country the wife is in no worse position and, indeed, to some extent she is in a slightly better position in the case of estates between £15,000 and £17,500.
I do not think that is unfair. At the same time we have considerably advantaged the poor dependent relatives who, in the future, will not have to pay the 20 per cent. which, in the case of a small legacy, is very heavy indeed if the relative is dependent largely upon the legacy for his or her support or has been dependent on the testator for his or her support during the testator's lifetime.

Mr. Assheton: Will the right hon. and learned Gentleman kindly deal with the question of the small minority? I am sure he does not wish to override the minority, although it may be very small in number.

The Solicitor-General: May I make one point before I deal with that? The one point I want to make is this: as the law stands a considerable privilege in the matter of payments is granted to wives in this sense, that where property is settled by one spouse upon the other for life there is an advantage. Of course, Estate Duty is payable on the death of the first spouse, say the death of the husband who has settled property on the wife for life, but on her death no further Estate Duty is payable, and that differentiation in favour of the close relative, the wife, is still preserved under the system we have introduced.
I am asked, what about the case of the large estate? What about the case of the estate over £35,000? Perhaps I may make this point with regard to it. It is in these large estates—not the small estates—where we think it is more than ever necessary that we should lift the burden from the poor relative and apportion it to the son who inherits the residue. In the case of a son who inherits £500,000 it is quite illogical and unfair that he should have to pay only 2 per cent. whereas the dependent relative has to pay 20 per cent. It is in these very large estates that the present incidence of the duty operates most unfairly and most unreasonably and, indeed, harshly upon the relatives and persons like the servants who are dependent on the testator's legacy to them. We think there is a stronger case in connection with the larger estates than there is with the smaller estates. In the largest estates we find this completely unfair incidence of Legacy Duty and Succession Duty upon those who are least able to pay it. It is in this case that we think it is most necessary to make the change.

Mr. Keeling: Would the right hon. and learned Gentleman deal with the anomaly whereby, under the new scale, some non-related beneficiaries will pay considerably less than they pay under the present scale? I will give him an example. On an estate of over £50,000 under the new consolidated scale a non-related beneficiary will pay 35 per cent.—that is, £17,500—whereas under the old scale he paid 44 per cent., i.e., Estate Duty of 24 per cent. plus Legacy Duty of 20 per cent., i.e., a total of £22,000—£4,500 more than under the new scales. How can the right hon. and learned Gentleman justify the system whereby, on the whole, relations will pay more while there is this glaring case in which a non-related beneficiary will pay very much less?

5.15 p.m.

The Solicitor-General: There are two answers to that and one is that these increases—I am perfectly certain I am right—to which the hon. Gentleman referred are increases which are not attributable solely to this re-arrangement but are also attributable to the lift; that is to say, the extra revenue which the Chancellor desires to obtain from Death Duties.

Mr. Assheton: But this is a decrease.

The Solicitor-General: Perhaps I may first make one point which I should have made earlier. Take the case of large estates. In the majority of cases, nearly always, the residue goes to a near relative. That is to say, if one looks at the matter by and large one finds that the residue goes to the near relative who pays only 2 per cent. Only small portions—£1,000 or £2,000 or, at most, £5,000—go to the dependant who pays 20 per cent. No doubt the dependants, who pay 20 per cent., are substantially advantaged by our proposals, but that is the very thing we think is fair. We think that is exactly what should happen.
If we take the case of the residue, we find that the total payment on the residue is, of course, substantially increased in the case of estates above. £35,000, but that brings me to the second point I was making. In the case of the residue, in such a case, there is a substantial lift in duty and that substantial lift is attributable only to a small extent to the rearrangement and to a large extent to the extra amount of revenue which the Chancellor desires to obtain from Death Duties. In the case of an estate of, say, £75,000 to £100,000 the combined duty will be raised from 30 to 45 per cent., but only 5 per cent. of that will be attributable to the re-arrangement and 10 per cent. will be attributable to the extra amount of Death Duties it is desired to obtain.

Mr. Keeling: I do not think the right hon. and learned Gentleman appreciated the point I made. May I repeat it? Whereas, under the Bill, if an estate of over £50,000 goes to a near relative the consolidated duty payable will be much more than it is at present, if it goes to a non-related beneficiary it will be very substantially less—it will be £17,500 instead of £22,000. I want the right hon. and learned Gentleman to justify that anomaly, if he can.

The Solicitor-General: I am not sure of the hon. Gentleman's figures and I shall have to accept them from him. We have to legislate for the great majority of cases and in the great majority of cases the position is that the relative pays less. We think it is perfectly right.

Mr. Assheton: The relative pays more.

The Solicitor-General: Two things happen. The total amount is lifted. That is attributable, in the case of an estate of £75,000, as to two-thirds to the extra revenue which the Chancellor desires to acquire and as to one-third to the rearrangement. That is in the case of an estate of that magnitude, but the individual amount which the dependant relative may have to pay is, in relation to him, less than it was under the old system—and that is what we think should happen.

Mr. Stanley: But what of this case?

The Solicitor-General: That is in the majority of cases. Take the case where the residue is left to the son and a legacy is left to a dependent relative. The dependent relative pays 20 per cent. at the moment. Now, Estate Duty will include the amount attributable to Legacy Duty and Succession Duty and the total amount is raised, but——

Mr. Stanley: We quite understand the case which the right hon. and learned Gentleman has been putting to us, but an example has been put to him and we should be very much obliged if he could deal with that example. It seems true that in that case, while these relatives will be made to pay more, a complete stranger will get off with very much less.

The Solicitor-General: I am not quite sure of the figures which the hon. Member for Twickenham (Mr. Keeling) gave. Take the case——

Mr. Assheton: May I assist the right hon. and learned Gentleman by giving one figure"? Up to £67,000, in every case of an estate left to a stranger, the Death Duty will be substantially less.

The Solicitor-General: What I am saying is that one has to look at what is the reality of the situation. As I say, it is not generally the case that an estate is left to a stranger. Actually, I doubt if in the case mentioned it will be very much less. I mentioned the case of an estate of £3,000,000——

Mr. Stanley: Not a usual one.

The Solicitor-General: —where the 10 per cent. lift increases the duty at the moment by only 2½ per cent. So I doubt if the figures are quite as stated, if I may say so with all respect to the hon. Gentleman who quoted the example. The fact

is we are legislating, as I said before, not for cases where estates go to strangers—that sometimes happens—but for the majority of cases where they go to the children or to the wives. That is the sort of case we are dealing with, and that is the large majority of cases. I am saying that in these cases we are taking to some extent the burden off dependent relatives and putting it on the general body of the estate, and that is what we think is perfectly fair. In the case of an estate which is left to a stranger, it may be that there is, as the hon. Gentleman said, a reduction, but, as I am saying, in the majority of cases we think it works out fairly, because, though there is a reduction in the case of the dependent relative, the incidence is fairly placed where it should be, and is not placed on the shoulders of the person who can least afford it, which is the situation under the existing law.
For these reasons we think the new system is one which does, at any rate, work in the great majority of cases equitably. In the case of estates under £17,500 it certainly works better than the present system, which does, we think, operate unfairly. In the case of estates over £17,500 one has to remember that, even though the burden is shifted from one type of beneficiary to another, it is shifted in a sense which we think is fair—in the sense that that beneficiary is nearly always a person who inherits a lesser amount than the child who takes the residue, and can afford to pay not nearly as well as the person who takes £500,000. Therefore, we do not think it works unfairly in the case of a larger estate.
In the case of a small estate we have tried to simplify the matter, and we have certainly, we think, achieved that, and we do not think there is any justification for the accusation that we are in any sense invading the rights of the family or in any sense removing privileges which ought to remain in the case of those estates under £17,500. They remain, as I have said. In the case of an estate over that, the near relative is disadvantaged to the advantage of the more distant relative; and in the cases we think one would actually be dealing with, where normally there is a small legacy, we think the system which we have devised works more fairly than the existing system.

Mr. Gallacher: Before the right hon. and learned Gentleman sits down may I ask him a question? I did not want to interrupt him before. In view of the line taken by the opposite side of the Committee about strangers, may I ask the right hon. and learned Gentleman if he is not aware that Scripture lays it down that we should give special consideration to the stranger within our gates?

Sir Hugh Lucas-Tooth: Here we are concerned with fairly substantial estates. Estates under £15,000 are not greatly affected, and on estates between £15,000 and £17,000-odd the change is not very large. It is the middle range of estates that are affected by this, and whether or not this change is fair to those estates is what we have to decide upon on these Clauses today. The right hon. and learned Gentleman argued that the present system often operated in a converse sense to what testators intended when they gave gifts. Of course, that is true in the cases of those testators who make their own wills; in almost every one the testator who makes his own will almost invariably produces a result which is the opposite of what he intends.
However, in the case of these substantial estates, it is the general practice of mankind to go to solicitors for advice, and in a will drawn in that way we invariably find that the whole of the Death Duties are expressly directed to be paid out of the residue of the estate, so that there can be no question whatever of defeating any of the testator's intentions. We find in any properly drawn will a general direction that the Estate Duty and the Legacy Duty are to be paid before any of the legacies. In fact, what the testator does is to give a second legacy which he directs is to go on to the estate as a whole, and the result, therefore, is that the remoter relative gets precisely the sum which is given to her by the will—£1,000 or £2,000 or whatever it may be, as indicated by the Solicitor-General.
The curious thing about these Clauses seems to me to be that the Government have brought them forward on the basis that they are a useful reform, that they are a simplification of the law which will be generally welcomed. I am not

for a moment saying that they do not amount to some sort of simplification, but I think it will be generally agreed that, on the whole, our system of Death Duties has not produced any very great complexity and no terrible conundrums for those concerned. I am quite certain that the hon. and learned Member for East Leicester (Mr. Donovan) will agree that, if we compare Death Duties with Income Tax, the need for revision lies in the Income Tax and not in the Death Duties.

Mr. Donovan: Really, that is not so.

Sir H. Lucas-Tooth: I hope that the hon. and learned Gentleman will make a speech about it. I, at any rate, have no doubt whatever that, so far as the community at large is concerned, it would welcome some kind of simplification of the Income Tax and is largely indifferent to simplification of the Death Duty code—which is fairly clearly indicated by the small number of Members sitting on the opposite side of the Committee. There is a clear lack of interest in the matter. For this reform there is really no great public demand, and the right hon. and learned Gentleman let the cat out of the bag when he said that the real reason for these Clauses is that the Chancellor wants a further £20 million out of estates. It would have been much better if we had been told so at the start.
I suggest that the way in which it is being done is entirely absurd. If the real intention is to raise a further £20 million, it is a most extraordinary way to set about it to give a very substantial measure of relief in a large number of cases, because that is what is being done here. So far from remoter relatives paying a higher amount in Estate Duty, the result will be that they will pay a lower rate. That simply means that to obtain this £20 million additional revenue, the Chancellor has had to make an even greater increase on the Estate Duty in favour of wives and children and nearer relatives. If we could argue this on the straightforward basis of Estate Duty the matter would be different, but it seems to me wholly wrong that we should relieve the remoter relatives and throw a heavier burden on the nearer relatives—that a man should pay less when he leaves his fortune to his mistress and more when he leaves it to his wife, that he should


pay less when he leaves his fortune to his illegitimate children, and more when he leaves his fortune to his own legitimate children. It seems to me to be wholly contrary to what is right and proper policy, but it is the general policy which has been pursued since this Government has been in office.
There has been an increasing tendency to make it more difficult for a man to save and endow for his own family, while at the same time making it easier for him to alienate his money in favour of strangers. If this policy is pursued it will be found that young people with good prospects will, instead of getting married, go through a form of religious ceremony which is not recognised by the law; they will be able to save, first of all on Income Tax, and secondly on being able to make endowments in favour of their children while they are alive; and they will now be able to save further, because their so-called wives and their illegitimate children will be able to take advantage of these provisions when they die. This is a wholly wrong policy which I hope the Committee will reject.

5.30 p.m.

Mr. David Eccles: I have not had the advantage of a legal training, so that I, unlike the Solicitor-General, may not be able to make myself plain on this very complicated Clause. The Solicitor-General said that the object of this Clause was to simplify the law and to make it fit more into actual life. As my hon. Friend the Member for South Hendon (Sir H. Lucas-Tooth) has just pointed out, that is precisely what the Clause does not do. In actual life wives and children mean more than distant relatives, more than a cats' home, and more than leaving money to party funds, and if we want our law to fit in with the kind of social structure in which we believe, founded upon the family, we must not pass this Clause.
The Labour Party cannot go on telling us that they believe in a Christian ethic, that they believe in Christian values, all of which have long been associated with the family, and then bring this sort of Clause before the House of Commons. They cannot have it both ways. To have the sentimental nonsense that some hon. Members opposite talk on platforms, and then have them coming down here and

bringing in a Clause such as this—which means that supposing I selected my Uncle Arthur, or my Aunt Edith, or the T.U.C., or my mistress, to leave my money to, they would be better off under this Clause than if I left it to my wife—is absurd, and we ought not to pass this Clause on moral grounds.

Mr. Glenvil Hall: That is not so.

Mr. Eccles: It certainly is true, and the the Solicitor-General knows that it is true. But even if we could not point out any anomalies, and supposing there were none—which there are—is it right that the law of England should not make a difference in favour of the family and the near relative? That is the root of the matter. We can argue about the half-dozen serious cases that have already been cited, especially in the band of estates between £25,000 and £35,000, but the real point is: ought we to change the law of England and give no advantage to the wife and the child?
I have never heard more nonsense than that which the Solicitor-General talked about the aged aunt of the rich testator. The rich testator is perfectly capable of making proper provision for his aged aunt; it is for him to say how he wants to leave his money. For the Solicitor-General to say that he will take care of the aged aunt and advantage her under this provision, and make the son, or whoever it is, pay, is absolutely absurd. All that the House of Commons should do is to lay down the general principles on whether or not we think that the near relatives of the family are people who should be advantaged by law as against these strangers and more remote relatives, and then leave it to the testator in his conscience to do the best. If the institutions that we put upon the Statute Book do favour the family, that has an effect upon the way people think about the family: institutions act upon character and character acts upon the institutions; it is a two-way process. Here we are destroying something which is of value.

Mr. Glenvil Hall: Mr. Glenvil Hall indicated dissent.

Mr. Eccles: Since the Financial Secretary shakes his head, would he kindly answer whether this is true? If tomorrow I left the whole of my money to a cats' home, after this Clause is on the Statute Book would it not bear the


same duty as if I left it to my wife? Is that a fact? It is perfectly clear that that would be so.

Mr. Glenvil Hall: That, of course, is not the point, and it is not the way hon. Gentlemen opposite put it before. Under the present law, which is not being altered, the widow is particularly looked after. In addition, I should like to remind hon. Members that for estates up to, I think, £17,500 or £17,250, not only is the scale not changed, but the widows and children do not even have to contribute to the extra £20 million which my right hon. and learned Friend is collecting.

Mr. Eccles: The Financial Secretary has given his case away. He says that up to £17,500, the legacy going either to the cats' home or to the widow, the widow would not be disadvantaged as compared with her present position. But thereafter she will be, and I say that it is not the business of the House suddenly to change its view about the family when we get to a certain level of estate. That should be a matter of principle throughout the whole of the Death Duties legislation: that the family is firmly put in front of the stranger and the cats' home. I very much hope that the Government will look at this again. We have had a very wide Debate, and there may be another opportunity to discuss the whole question of the incidence of Death Duties. I feel that the Committee would wish to confine the Debate at the moment to the consanguinity principle.

Mr. Ivor Thomas: I cannot feel that the Solicitor-General made a very adequate reply to the cogent arguments of my right hon. Friend the Member for the City of London (Mr. Assheton). But he cannot be blamed, for he could not make out a better case than the one he had put into his hands, and I doubt whether the Solicitor-General has ever had such a poor brief put into his hands as the one he was given on this occasion. There really is not a shred of a case for what is being done by the Government. The right hon. and learned Gentleman got into a tangle by trying to compare the duties that would be paid on certain estates under the old scheme with those which would be paid under the new scheme. To my mind that is not the important thing. I am certain

that my hon. Friend the Member for Chippenham (Mr. Eccles) has hit the nail on the head.
We are making a fundamental change in the law of England which will react to the detriment of the family. Under our existing law there is a gradation of duties according to degrees of consanguinity. That will in future disappear; and, as my hon. Friend so well said, it will make no difference whether an estate is left to the widow, to the stranger within the gate, to the cats' home or to a political party.

Mr. Sidney Silverman: Estates of a certain amount.

Mr. Thomas: That is not the point. The hon. Member is falling into the error that I am trying to avoid. I do not think that it is of great value to compare a particular case under the old and under the new system. In the case of all wills made from now on there will be no difference between the widow, the stranger within the gate, and the cats' home. All estates, small or large, will bear the same rate of duty. We must look ahead. We are now committing ourselves to a fundamental change in the law of taxation which may be of the utmost importance for its social consequences.
The real reason, as given out in the admissions of the Solicitor-General and Financial Secretary, is that the Chancellor wants to get some more money out of this re-arrangement. The Solicitor-General has invoked the case of the aged and impoverished aunt. If he wanted to benefit the aged and impoverished aunt he could very well have come to the Committee with an Amendment for that specific purpose. I do not think he would have met with much opposition in the Committee. We all know perfectly well that it is always possible to invoke some hard case, but hard cases make bad laws. As has been said, if testators wish to make provision for aged aunts there are always means by which they will be able so to do.
As I understand we are having a general Debate on this matter—I think my hon. Friend the Member for Chippenham was mistaken in what he said in view of an earlier exchange—may I recall the famous puzzle about when a difference of degree becomes a difference of kind? It appears to me that the successive increases in the Death


Duties have converted a difference of degree into a difference of kind. The old theory behind the Death Duties was that they were deferred Income Tax, but it is no longer possible to maintain that theory today. The rate of duty on an estate of £1 million and over has increased from 8 per cent. at the inception of the Estate Duty in 1894 to 80 per cent. today. It is a good example of that rake's progress to which Lord Milverton has so eloquently drawn attention in another place. Year after year successive Chancellors have gone on giving another turn to the screw, and I think the time has now come to protest because the fiscal and the social consequences of these vastly increased Death Duties are extremely serious.
Let me deal first with the fiscal consequences. The Death Duties are in their nature fiscally self-defeating, for it is obvious that the income from a large estate will pay more in Income Tax and Surtax than will the income from a number of small estates of equivalent value. The income from an estate of £1 million will clearly pay more in Income Tax and Surtax than the income on 10 estates of £100,000. There is an even more important fact to be noted, that these heavy duties are noticeably diminishing the potential taxable capacity of the country. Like my right hon. Friend the Member for the City of London (Mr. Assheton), I do not suggest that these duties are destroying capital, but they are clearly preventing new capital from coming into being. In the past generation or so there must have been a sum of about £2,500 million collected in Death Duties. At 4 per cent. that capital sum would have produced an income of £100 million a year, and the taxation on that income has been lost. The consequences for the economic life of the country of the destruction of this potential capital has been very serious. I suggest to the Committee it is time we called a halt in this process.
The social consequences are even more disturbing. I should like to ask the Financial Secretary a question about the facts. He said in a recent Debate that 10 per cent. of the people of this country own 90 per cent. of the capital. I suspect that that figure is taken from the work of Mr. Daniel and Mr. Campion published a long time before the war. I do not

know of any more recent examination, and I doubt whether that statement is true today. The social argument on the other side of the Committee is that these taxes are producing greater equality. But is equality necessarily desirable? It is automatically supposed by Members opposite that that is desirable, but have they thought of all the consequences of destroying the large estates in this way? One result will be that all power will be gathered into the hands of the State. I know of no more potent instrument for bringing about the totalitarian State in this country than the Death Duties. The diffusion of wealth over a large number of people is the surest guarantee of liberty.
We are moving now into a period when the high rate of Death Duties is beginning to have one specially disturbing social consequence. Following the bad example set by the State, people are beginning to use capital as income. This is a serious tendency which, unless checked, will have the most deleterious consequences for the nation. It has begun in an innocent way by people beginning to use capital for the education of their children instead of paying for their children's education out of income. That may seem a justifiable purpose, but before very long people will be saying that they are not going to leave their estates to the Chancellor of the Exchequer, for purposes of which they may not approve, but will use their estates in their lifetime not only for the education of their children but also for their own amusement.

5.45 p.m.

Mr. S. Silverman: The scope of this Debate has been considerably widened in the last few minutes, and I cannot help feeling considerable sympathy with Members opposite in having to listen to the speech which has just been delivered. Members opposite were making a perfectly simple and, I should have thought, quite arguable case, although I do not know whether it is right or not as I am not expert enough to say, about certain anomalies which result in a certain range of estates from the alterations proposed in the Finance Bill. I hope my hon. Friends will not mind if I say on that part of the matter that the result of the whole Debate has been to leave me in a little doubt; I am not quite sure who is right or who is wrong about it. The


hon. Member for Keighley (Mr. Ivor Thomas) then comes along and makes a different kind of speech altogether in which he raises the wider and broader issue.
The trouble with converts is that they always go too far. They always feel under some inner compulsion to assure their new-found friends that they really do belong somewhere at last. Therefore, they feel bound to adopt every outworn, exploded doctrine, or theory, or dogma, which the party they have joined have ever given credence to, and repeat it with much more fervour than that with which it was originally expounded, although it may long ago have been abandoned. It is, I believe, a fact that the Conservative Party have abandoned the thesis the hon. Member was putting forward. The hon. Member said that the difficulty was to find where a difference of degree becomes a difference of kind. I think the hon. Member found out when he crossed the Floor of the House—that is where the difference of degree which existed before became a difference of kind, which becomes more obvious every time the hon. Member opens his mouth.
What is he really saying? He is saying that the whole policy which has not merely been followed by this party but by the party opposite, and not merely in this country but in other civilised countries, is not to permit vast accumulations of wealth, in the field of inheritance at least, to go beyond certain limited figures. That is done in the United States, in France and, so far as I know, in every modern society, because it is regarded as a great danger that the wealth of a family should continue to grow beyond certain recognised limits fixed by the State. It is no monopolised dogma of the Labour Government that it is a bad thing to let these estates grow in that way. It is a bad thing for the estate, bad for the country and, above all, bad for the recipients of the estates. Everybody knows that, and the hon. Member for Keighley knew it until the difference of degree became the difference of kind, and he forgot all about it.
Only the other day the Conservative Party were putting down an Amendment to a previous Clause which, if they had had their way, would have had the effect of raising the cost of living for a vast majority of our people. If we are to believe the hon. Member for Keighley,

they are now adding another glory to that one—at the same time as they want to raise the cost of living for poor people they also want to lower the cost of dying for the millionaire. If that is the Conservative Party, then the sooner the hon. Member finds his proper place on the Opposition Front Bench the better.

Lieut.-Commander Gurney Braithwaite: I am sure the Solicitor-General will feel that as a result of the Debate this matter ought to be further examined. When he addressed us in, I think, the absence of the hon. Member for Nelson and Colne (Mr. S. Silverman)——

Mr. S. Silverman: No.

Lieut.-Commander Braithwaite: If the hon. Gentleman was here he will recollect that the Solicitor-General opened his remarks on a wider front than the Debate which followed. He mentioned the incidence of Death Duties as a whole. But I feel that the right hon. and learned Gentleman has not met the main argument which has been advanced from this side of the Committee.
We are not dealing so much with the effect of these proposals as between near and distant relatives, important though that is—I am sure the hon. Member for Nelson and Colne will agree that to be unfair above a certain limit of residue is not a good principle for the House of Commons to follow—but the effect as between the intimate family circle, the wife and child on the one hand, and what was so euphemistically described by my hon. Friend the Member for Twickenham (Mr. Keeling) as the "non-related beneficiary." That is a somewhat flattering description, I think, of the type of lady we have in mind. There is an inducement, under this proposal, to the testator to leave his money in such a direction as that, and that has not been controverted by anything that has been said today. Indeed, I am astonished that this Chancellor, of all Chancellors, should lend himself to such an immoral suggestion. I am surprised that he absented himself from the Committee while this horrid scene was being enacted——

Mr. Glenvil Hall: I should have thought that the hon. Member would realise that the Chancellor would have been here if he had not been


detained for a moment elsewhere. [Laughter.] Members opposite could not have heard the hon. and gallant Member's last observation: his assertion was that my right hon. and learned Friend the Chancellor had absented himself from the Debate, and I said that he would have been here if he had not been engaged elsewhere.

Lieut.-Commander Braithwaite: Whenever we get into difficulties the Financial Secretary always comes to our aid with statements which might not have occurred to us; here, at least, is a firm grasp of the obvious. I said I was surprised that the Chancellor had absented himself from the Debate while this horrid scene was being enacted. Perhaps he is steadying the cost of living through the consumption of some liquid in the Palace of Westminster.
However, I shall leave the non-related beneficiary for the time being, as it seems to have upset the Treasury Bench, and come to the main argument. The Solicitor-General declared that to say that the proposal would deprive the family of the breadwinner if the Treasury collected Death Duties when the breadwinner died in the prime of life was an argument against the imposition of Death Duties at all. That is an over-simplification. When Death Duties are light the effect is light, but when they are at their present level, and are increasing, it is a severe blow to a wife and her children should the breadwinner be taken from them in the prime of life. It is bad at any time, but it is particularly hard then.
My hon. and gallant Friend the Member for Penrith and Cockermouth (Colonel Dower) pointed out that a wife in the Union of South Africa, in these circumstances, was not mulcted in any way. It is true, as the hon. Member for Nelson and Colne said, that there is nothing exceptional to this country about the collection of Death Duties, but in these islands—and all Governments are blameworthy to a certain extent, I admit—there has been an unfortunate tendency always to regard Death Duties as a legitimate source of revenue. In many other places they are earmarked for sinking fund purposes and a reduction of debt, which are very different propositions.
It used to be said by Chancellors of all types of Government that in the interwar years the revenue collected from Death Duties approximately balanced the out-goings on war pensions, which were a declining demand on the Revenue. That argument, of course, has become less forceful as the years have gone by, and I was shocked to hear the Solicitor-General frankly admit, for the first time, that here are £20 million which are required as revenue this year, and which must be obtained. As I said last week we on this side do not admit that for one moment. We do not admit that this £20 million is necessary to the Revenue. It is almost precisely the same amount as has been squandered on the fatuous groundnuts experiment. This sum is now to be obtained by plundering widows and orphans.

Mr. S. Silverman: Not the millionaires?

Lieut.-Commander Braithwaite: Does the hon. Member really describe those who leave estates between £17,000 and £67,000 as millionaires?

Mr. Silverman: No, but I say that the bulk of Death Duties is collected from large estates, and not from small ones. To moan about widows and orphans paying Death Duties is to complain about a percentage of millionaires paying their proportion to the Revenue.

Lieut.-Commander Braithwaite: I respect the hon. Member's parliamentary ability, but it seems that he has not studied this question in sufficient detail. What we have to address our minds to is the discrimination on estates between £17,000 and £67,000. That is where it happens to fall and it falls very harshly. We can delete the millionaires from our argument.

Mr. S. Silverman: And delete the widows.

6.0 p.m.

Lieut.-Commander Braithwaite: To delete the widows is an even more sanguinary proposition. This afternoon from the Socialist Benches we are getting some hair-raising proposals. In view of the fact that we are working under a time table, I shall confine myself to the matter in hand. There is a lot more that can be said, but I suggest in all sincerity to His Majesty's Government that here


is a matter which requires careful examination on the grounds of equity apart from any other grounds.

Mr. R. A. Butler: It will be necessary for us to reach a decision now on this Amendment. We undertook early in the morning at the end of our last Sitting, that we would try to conclude the Amendments at eight o'clock this evening, and leave the new Clauses to be gone into then.

Mr. Glenvil Hall: I should like to get this straight; it was not eight o'clock but seven o'clock. [HON. MEMBERS: "Dinner time."] The right hon. Member for West Bristol (Mr. Stanley), after dinner time had been suggested, reduced it to actual figures and mentioned seven o'clock—about seven o'clock not eight o'clock.

Mr. Butler: The right hon. Gentleman need not quarrel about it. My right hon. Friend the Member for West Bristol informed me before he went out a moment ago that he had in mind that at eight o'clock we would finish the Amendments, after which we could make progress with the new Clauses. We shall try our best to hurry up matters, and I do not think the right hon. Gentleman need get excited that we are going to break any undertaking that we have given.

Mr. Glenvil Hall: We shall see.

Mr. Butler: If the right hon. Gentleman refuses to accept our undertaking, I shall refuse to go on with the Debate. I do not think he has any reason to doubt our word. The Opposition have freely entered into an agreement, and given an undertaking that we shall finish at a certain time, and unless the right hon. Gentleman withdraws that observation, that will finish the matter as far as the Opposition is concerned.

Mr. Glenvil Hall: Of course, I withdraw. All I said was that we shall see and so we shall. If the phrase hurts the right hon. Gentleman I shall unreservedly withdraw. We shall see.

Mr. Butler: I am obliged to the right hon. Gentleman, and we shall see. I accept the answer in the spirit of his reply and not in the spirit in which I

heard it while he was sitting on the Government Front Bench.
I do not want to emphasise all the arguments that have been put forward on this matter, but we shall undoubtedly take the Amendment to a Division, because we cannot accept the view enunciated by the Solicitor-General on behalf of His Majesty's Government that up to a certain level, namely £17,500, the Government want to show the country that they are keen to help the widows and other relatives, but over that figure they are not so keen to carry the principle into effect. We think that that is not a moral basis on which taxation should rest whether Income Tax, Death Duties or any financial structure. We maintain in this matter that helping the stranger under the new arrangement suggested by the Chancellor of the Exchequer, will go against the widow or the near relative. By so doing the Chancellor is breaking faith with one of the most important principles of our taxation system. Frankly, if he is going to count, as has his hon. Friend the Member for Nelson and Colne (Mr. S. Silverman), the higher ranges of income only to mulct for the purposes of Death Duty, he might have had the decency to carry the principle in favour of the widow and the relative into the higher realms on which he depends for this duty.
In order to supplement a point made from this side of the House, I would remind the Solicitor-General that if an estate of £50,000 is left to a relative, the sum he pays is £15,500 as compared with £11,780 in other ways, an increase of £3,720. If the same size of an estate is left to a stranger, he pays £3,300 less than before, and similar figures can be given for larger estates. These show that there is no doubt that the stranger is coming off much better than before under the proposals of the Chancellor. I am glad to see the Solicitor-General nod his head, because that is an acknowledgment of the whole of the argument which we have been putting this afternoon. The Solicitor-General was badly briefed and he submitted his brief without conviction. In view of the lack of principle exhibited by the Government in this matter, we intend to take it to a Division.
Question put, "That those words be there inserted."

The Committee divided: Ayes, 113; Noes, 238.

Division No. 177.]
AYES
[6.6 p.m.


Assheton, Rt. Hon. R.
Grimston, R. V.
Nutting, Anthony


Aster, Hon. M.
Hannon, Sir P. (Moseley)
Odey, G. W.


Baldwin, A. E.
Harden, J. R. E.
Peake, Rt. Hon. O.


Beamish, Maj. T. V. H.
Hare, Hon. J. H. (Woodbridge)
Peto, Brig. C. H. M.


Birch, Nigel
Harris, F. W. (Croydon, N.)
Pickthorn, K.


Boles, Lt.-Col. D. C. (Wells)
Harris, H. Wilson (Cambridge Univ.)
Rayner, Brig. R.


Boothby, R.
Headlam, Lieut.-Col. Rt. Hon. Sir C.
Reed, Sir S. (Aylesbury)


Bower, N.
Hinchingbrooke, Viscount
Renton, D.


Boyd-Carpenter, J. A.
Hogg, Hon. Q.
Roberts, Emrys (Merioneth)


Braithwaite, Lt.-Comdr. J. G.
Hope, Lord J.
Roberts, H. (Handsworth)


Bromley-Davenport, Lt-Col. W.
Hurd, A.
Robertson, Sir D. (Streatham)


Butcher, H. W.
Hutchison, Lt-Cdr. Clark (Edin'gh, W.)
Robinson, Roland (Blackpool, S.)


Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)
Hutchison, Col. J. R. (Glasgow, C.)
Ropner, Col. L.


Challen, C.
Jeffreys, General Sir G.
Ross, Sir R. D. (Londonderry)


Channon, H.
Keeling, E. H.
Savory, Prof. D. L.


Clarke, Col. R. S.
Kendall, W. D.
Shepherd, W. S. (Bucklow)


Conant, Maj. R. J. E.
Lambert, Hon. G.
Spearman, A. C. M.


Crookshank, Capt. Rt.. Hon. H. F. C.
Lancaster, Col. C. G.
Stanley, Rt. Hon. O.


Crosthwaite-Eyre, Col. O. E.
Lennox-Boyd, A. T.
Strauss, Henry (English Universities)


Crowder, Capt, John E.
Lindsay, M. (Solihull)
Sutcliffe, H.


Cuthbert, W. N.
Linstead, H. N.
Taylor, C. S. (Eastbourne)


Darling, Sir W. Y.
Lloyd, Selwyn (Wirral)
Taylor, Vice-Adm. E. A. (P'dd't'n, S.)


De la Bère, R.
Low, A. R. W.
Teeling, William


Dodds-Parker, A. D.
Lucas, Major Sir J.
Thomas, Ivor (Keighley)


Dower, Col. A. V. G. (Penrith)
Lucas-Tooth, Sir H.
Thornton-Kemsley, C. N.


Drayson, G. B.
MacAndrew, Col. Sir C.
Touche, G. C.


Drewe, C.
McCorquodale, Rt. Hon. M. S.
Turton, R. H.


Dugdale, Maj. Sir T. (Richmond)
McFarlane, C. S.
Watt, Sir G. S. Harvie


Duthie, W. S.
Mackeson, Brig. H. R.
Webbe, Sir H. (Abbey)


Eccles, D. M.
Maclay, Hon. J. S.
Wheatley, Colonel M. J. (Dorset, E.)


Eden, Rt. Hon. A.
Maclean, F. H. R. (Lancaster)
White, J. B. (Canterbury)


Erroll, F. J.
MacLeod, J.
Williams, C. (Torquay)


Fletcher, W. (Bury)
Maitland, Comdr. J. W.
Williams, Gerald (Tonbridge)


Foster, J. G. (Northwich)
Mellor, Sir J.
York, C.


Fraser, H. C. P. (Stone)
Morris, Hopkin (Carmarthen)
Young, Sir A. S. L. (Partick)


Fyfe, Rt. Hon. Sir D. P. M.
Mott-Radclyffe, C. E.



Galbraith, Cmdr. T. D. (Pollok)
Neven-Spence, Sir B.
TELLERS FOR THE AYES:


Gammans, L. D.
Nicholson, G.
Cmdr. Agnew and


Gridley, Sir A.
Noble, Comdr. A. H. P.
Mr. Wingfield Digby.




NOES


Acland, Sir Richard
Chamberlain, R. A.
Fletcher, E. G. M. (Islington, E.)


Adams, Richard (Balham)
Champion, A. J.
Follick, M.


Albu, A. H.
Chater, D.
Foot, M. M.


Allen, A. C. (Bosworth)
Chetwynd, G. R.
Forman, J. C.


Alpass, J. H.
Cluse, W. S.
Fraser, T. (Hamilton)


Anderson, A. (Motherwell)
Cooks, F. S.
Gibbins, J.


Attewell, H. C.
Collick, P.
Gilzean, A.


Austin, H. Lewis
Collindridge, F.
Glanville, J. E. (Consett)


Awbery, S. S.
Collins, V. J.
Gooch, E. G.


Ayles, W. H.
Colman, Miss G. M.
Goodrich, H. E.


Ayrton Gould, Mrs. B.
Corlett, Dr. J.
Gray, C. F.


Balfour, A.
Crawley, A.
Grierson, E.


Barstow, P. G.
Cripps, Rt. Hon. Sir S.
Griffiths, D. (Rother Valley)


Barton, C.
Crossman, R. H. S.
Griffiths, Rt. Hon. J. (Llanelly)


Battley, J. R.
Daggar, G.
Griffiths, W. D. (Moss Side)


Bechervaise, A. E.
Daines, P.
Gunter, R. J.


Benson, G.
Dalton, Rt. Hon. H.
Guy, W. H.


Bevan, Rt. Hon. A. (Ebbw Vale)
Davies, Edward (Burslem)
Haire, John E. (Wycombe)


Binns, J.
Davies, Haydn (St. Pancras, S. W.)
Hall, Rt. Hon. Glenvil


Blackburn, A. R.
Davies, R. J. (Westhoughton)
Hamilton, Lieut.-Col. R.


Blenkinsop, A.
Deer, G.
Hardy, E. A.


Blyton, W. R.
de Freitas, Geoffrey
Haworth, J.


Bottomley, A. G.
Delargy, H. J.
Herbison, Miss M.


Bowden, Flg. Offr. H. W.
Diamond, J.
Hobson, C. R.


Braddock, Mrs. E. M. (L'pl, Exch'ge)
Dobbie, W.
Holman, P.


Braddock, T. (Mitcham)
Dodds, N. N.
Holmes, H. E. (Hemsworth)


Brook, D. (Halifax)
Driberg, T. E. N.
Horabin, T. L.


Brooks, T. J. (Rothwell)
Dugdale, J. (W. Bromwich)
Houghton, A. L. N. D. (Sowerby)


Broughton, Dr. A. D. D.
Dye, S.
Hoy, J.


Brown, T. J. (Ince)
Edelman, M.
Hudson, J. H. (Ealing, W.)


Brown, W. J. (Rugby)
Evans, Albert (Islington, W.)
Hughes, Hector (Aberdeen, N.)


Burden, T. W.
Evans, S. N. (Wednesbury)
Hughes, H. D. (W'lverh'pton, W.)


Burke, W. A.
Ewart, R.
Hutchinson, H. L. (Rusholme)


Butler, H. W. (Hackney, S.)
Fairhurst, F.
Hynd, H. (Hackney, C.)


Carmichael, James
Farthing, W. J.
Hynd, J. B. (Attercliffe)


Castle, Mrs. B. A.
Fernyhough, E.
Irving, W. J. (Tottenham, N.)




Jay, D. P. T.
Noel-Baker, Rt. Hon. P. J. (Derby)
Stubbs, A. E.


Jeger, Dr. S. W. (St. Pancras, S. E.)
Oliver, G. H.
Summerskill, Rt. Hon. Edith


Jenkins, R. H.
Orbach, M.
Sylvester, G. O.


Jones, D. T. (Hartlepool)
Pargiter, G. A.
Taylor, R. J. (Morpeth)


Jones, P. Asterley (Hitchin)
Parker, J.
Thomas, D. E. (Aberdare)


Keenan, W.
Paton, Mrs. F. (Rushcliffe)
Thomas, George (Cardiff)


King, E. M.
Paton, J. (Norwich)
Thomas, I. O. (Wrekin)


Kinghorn, Sqn.-Ldr. E.
Pearson, A.
Thorneycroft, Harry (Clayton)


Kinley, J.
Peart, T. F.
Thurtle, Ernest


Kirby, B. V.
Poole, Cecil (Lichfield)
Titterington, M. F.


Lee, F. (Hulme)
Popplewell, E.
Tolley, L.


Leonard, W.
Porter, E. (Warrington)
Tomlinson, Rt. Hon. G.


Leslie, J. R.
Porter, G. (Leeds)
Turner-Samuels, M.


Levy, B. W.
Proctor, W. T.
Ungoed-Thomas, L.


Lewis, J. (Bolton)
Pursey, Comdr. H.
Vernon, Maj. W. F.


Lipton, Lt.-Col. M.
Randall, H. E.
Viant, S. P.


Logan, D. G.
Ranger, J.
Walker, G. H.


Lyne, A. W.
Reeves, J.
Wallace, G. D. (Chislehurst)


McAdam, W.
Reid, T. (Swindon)
Warbey, W. N.


McAllister, G.
Rhodes, H.
Walkins, T. E.


McGhee, H. G.
Ridealgh, Mrs. M.
Webb, M. (Bradford, C.)


Mack, J. D.
Roberts, Goronwy (Caernarvonshire)
Weitzman, D.


McKay, J. (Wallsend)
Robertson, J. J. (Berwick)
Wells, P. L. (Faversham)


Mackay, R. W. G. (Hull, N. W.)
Robinson, Kenneth (St. Pancras, N.)
West, D. G.


McLeavy, F.
Rogers, G. H. R.
Wheatley, Rt. Hon. John (Edin'gh, E.)


MacPherson, Malcolm (Stirling)
Ross, William (Kilmarnock)
White, H. (Derbyshire, N. E.)


Mainwaring, W. H.
Royle, C.
Whiteley, Rt. Hon W.


Mallalieu, J. P. W. (Huddersfield)
Segal, Dr. S.
Wilkes, L.


Mann, Mrs. J.
Sharp, Granville
Wilkins, W. A.


Manning, C. (Camberwell, N.)
Shawcross, C. N. (Widnes)
Willey, F. T. (Sunderland)


Mellish, R. J.
Shinwell, Rt. Hon. E.
Willey, O. G. (Cleveland)


Middleton, Mrs. L.
Shurmer, P.
Williams, D. J. (Neath)


Mikardo, Ian
Silverman, J. (Erdington)
Williams, J. L. (Kelvingrove)


Millington, Wing-Comdr. E. R.
Silverman, S. S. (Nelson)
Williams, Ronald (Wigan)


Mitchison, G. R.
Simmons, C. J.
Williams, W. R. (Heston)


Monslow, W.
Skeffington-Lodge, T. C.
Willis, E.


Moody, A. S.
Skinnard, F. W.
Woodburn, Rt. Hon. A.


Morris, Lt.-Col. H. (Sheffield, C.)
Smith, C. (Colchester)
Wyatt, W.


Morris, P. (Swansea, W.)
Smith, S. H. (Hull, S. W.)
Yates, V. F.


Mort, D. L.
Snow, J. W.
Young, Sir R. (Newton)


Moyle, A.
Sorensen, R. W.



Murray, J. D.
Soskice, Rt. Hon. Sir Frank
TELLERS FOR THE NOES:


Naylor, T. E.
Sparks, J. A.
Mr. Joseph Henderson and


Neal, H. (Claycross)
Stewart, Michael (Fulham, E.)
Mr. Hannon.


Nichol, Mrs. M. E. (Bradford, N.)
Stross, Dr. B.

Amendment proposed, in page 16, line 33, at end, insert:
and where the property in respect of which estate duty is chargeable passes to persons who, save for Section twenty-three of this Act, would have been liable to legacy duty or succession duty at the rate of 10 per cent., then on that proportion of the property passing and for the benefit of those persons there shall, without prejudice to the reduced rate applicable to agricultural values, be a further reduction of 2 per cent. in each of the rates."—[Mr. Stanley.]

Amendment negatived.

6.15 p.m.

Sir H. Lucas-Tooth: I beg to move, in page 16, line 43, after "shown," to insert:
that the property passes by reason only of a gift inter vivos or.
I understand that it is not the intention of the Clause to alter the law. The general principles of devolution are not to be affected, and the Clause is merely bringing the new provisions into order, having regard to what was done previously

in Clause 23. If that be so, there is no need for me to argue the merits of the case.
As I understand the position, the existing law is that no Estate Duty is payable on property given inter vivos by a foreigner when he is resident in Great Britain, even if he dies within the five-year period prescribed for those of British domicile. I suppose that the obvious example will be the wealthy American father-in-law coming here on a visit. He makes some gift to his child or to his daughter-in-law or son-in-law, as the case may be. Hitherto, such a gift would have escaped duty, because the test whether such duty was payable or not was whether or not Legacy Duty or Succession Duty was payable on the gift. As no Legacy or Succession Duty would have been payable in such a case, no Estate Duty was payable under the law as it has hitherto stood. Legacy and Succession Duty are being abolished, and some other test has to be put in their place.
The Clause is not very easy to follow, but it seems to provide that in the case of a gift inter vivos Estate Duty is not to be payable if the disposition is made by an instrument governed by a foreign law. In other words, if the donor made the gift in this country and carried it into effect by an instrument in accordance with the law of America or of France, no Estate Duty would be payable. If he carried his intention into effect by a gift made under English law, notwithstanding the fact that he was merely transferring foreign property, the Clause would operate to attract Estate Duty. I see the Financial Secretary to the Treasury nod his head, but surely that proposal is not in accordance with the intentions of His Majesty's Government. I hope that we can get an assurance that the Clause does not operate as I have suggested and that the Government will indicate that they will accept this or some similar Amendment.

Mr. Glenvil Hall: The hon. Gentleman has asked a number of questions, most of them, if not all of them, of a technical kind. As we are working against the clock perhaps he and the Committee will be satisfied if I say that all we seek to do by the subsection is to remodel, and not to change, the present law, in view of the fact that Legacy Duty and Succession Duty are ceasing to exist. The original Act goes back some time and was instituted to prevent people tranferring money abroad in certain circumstances or making gifts inter vivos and not paying Estate Duty on them.

Sir H. Lucas-Tooth: I am not certain what the right hon. Gentleman's intervention involved. Does he mean that in the case I have indicated it is the intention of the Government that no Estate Duty shall be payable? Will he look into this matter and, if my argument is correct, give some undertaking to put down an Amendment at a later stage?

Mr. Glenvil Hall: We are satisfied that there is no need. If the hon. Gentleman will look at the Clause he will see that the words cover a gift inter vivos.

Mr. Stanley: Surely the right hon. Gentleman will say that he will look at this again. We fully accept his assurance

that the intention of the Government is that there shall be no change. A case has been put that there might be a change. All we want him to say is that he will look at it again.

Sir S. Cripps: Certainly.

Amendment, by leave, withdrawn.

Mr. John Foster: I beg to move, in page 16, line 43, after "that," to insert:
by the law of the country in which it is situate such property is immovable property or.
This is also a technical Amendment. In view of the Financial Secretary's assurance that it is not intended to change the law, perhaps he will also look into this. I have here an opinion from a Chancery barrister who says:
It is to be hoped that Clause 24 (2) … may be amended before it is passed into law, because as it now stands it is impossible to advise with certainty on the meaning of the words … 'if it shown that the proper law.' Presumably the sub-clause is not intended to effect any change in the present law, but is only inserted consequential on the abolition of legacy duty.
He also says:
On the language of this sub-clause, it does not appear that effect has been given to that presumed intention.
I can assure the Financial Secretary that other opinions echo that fear that the intention has not been carried out.
The object of the Amendment is to ensure that immovable property abroad, whether passing in the estate of a person domiciled in Great Britain or outside Great Britain, shall not be taxed, as is the present position. The phrase "proper law" is one of the reasons why uncertainty has been introduced. The proper law under which property abroad passes can be regarded either as the law of the place where it is or the law of the disposition. I may say in my will, "I leave all my real property in England and Ireland to my son." Are there two proper laws—those of England and Ireland—or is the proper law the law of the will, which applies Irish law? If one says that Irish law is the proper law, there is a difficulty. If the will says, "I leave my property in England, Ireland and Ruritania," and Ruritanian law applies the law of nationality, there is a different proper law. I think I have said enough to show that the question


is technical. I do not think that the phrase "proper law" is the correct phrase to apply to wills. The phrase is usually applied to contracts.

The Solicitor-General: I am very grateful to the hon. Member for Northwich (Mr. J. Foster) for having called attention to the difficulties which might arise. We shall most willingly look into the points which he has raised. The general purpose of the Clause is in no sense to extend the charge which is at present created by the relevant provisions of the Finance Act, 1894, and the Finance Act, 1936. We simply want to reproduce them in the present Clause, and we have to alter the form because we leave out reference to Legacy Duty and Succession Duty. I am much obliged to the hon. Gentleman.

Mr. J. Foster: In view of that, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Colonel J. R. H. Hutchison: I propose to detain the Committee for a moment on a rather technical question which I put to the Solicitor-General earlier and which I thought it an advantage to ventilate publicly. It is the possibility of a very anomalous situation arising in connection with property liable to Estate Duty which is held in a foreign country where a system of blocked accounts operates. There are countries in which nationals of Great Britain can and do hold property, moneys and investments which they cannot touch. They may be able to buy and sell them in that country but they cannot bring the proceeds of the sale back here.
As I understand it, when an individual so circumstanced dies in this country, his estate becomes liable to Death Duty on the property held abroad. If the proportion of property held abroad is high in relation to that held in Britain he might be liable for more Death Duty than the total of his property held in Britain and at the same time, under the law as it stands, any part of his capital assets or the estate abroad cannot be liquidated in order to meet his liability to Death Duty. I do not know whether this peculiar anomaly has been considered by

the Government. If it has, how do the Government propose to right it?

Colonel Clarke: Earlier in the Debate the hon. Member for Chesterfield (Mr. Benson) said he found it difficult to make a case for different treatment for Death Duty on agricultural land from Death Duty in the case of a private business. I admit that it is difficult and that it is a subtle matter, but there is a great deal of difference. A man may die leaving a private business, and as a result a great deal of money may have to be taken out of the business to pay Death Duty. That business can be floated as a company. A man can take some money out and leave some in or take all of it out. Those working in such a business are very often better off because there is fresh money coming in and there are opportunities for advancement. They may not be as happy as in private business but they are often financially better off. The business runs perhaps as successfully as before and perhaps more successfully, in an association with a bigger business of the same kind. By and large, not much harm is done to the actual conduct of the business or to those working in it.
Let us take the case of an agricultural estate, a unit of 5,000 acres, which is about the size which is economically most satisfactory. I am making no party point over this. In the booklet, "Labour Believes in Britain," the Labour Party recommend the landlord and tenant system and estates of a certain size as the best way of carrying on the agricultural industry, and they are making provision for running estates of that sort under national ownership. When an estate of this kind has to face Death Duties, a great deal of money is probably taken out. Several things happen.
6.30 p.m.
It must be remembered that the capital in that unit of business in the agricultural industry probably represents two-thirds the fixed capital of the landlord and one-third the working capital of the farmer. Probably a certain amount of it has to be sold. The new landlord may not be so good. As in a great number of cases farmers borrow money from the bank, buy their farms and become their own landlords, the supposition is that as a rule, the new landlord is not so good. There is bound to be a break in con-


tinuity. Under the old estate, the estate staff knew those farms intimately, they knew which pipes were getting furred up, what ranges would do a few more years, and they had a great deal of intimate knowledge which was a great help in keeping things going. Again, when the farmer becomes his own landlord the first thing that happens is that the capital has to be spread over three times the assets. He has to provide fixed capital as well as working capital, and nearly always the farm suffers in consequence. If the farmer suffers, production suffers as well.
Today we are doing all we can to increase and improve our agricultural production. I believe that the breaking up of agricultural units has a bad effect when the farmer suffers from a loss of capital or from a new landlord who has to start afresh and brings no continuity into the management of the fixed capital. Further than that, in the remainder of the estate the landlord is crippled because he has had to find ready money to pay Death Duties. Schemes for improvement have to be cut down or stopped altogether. The incidence on the farmer and on the industry in the case of taking large Death Duties from agricultural estates is far greater than in the case of taking them from a business. There is a subtle but very definite difference between the incidence of Death Duties on the two kinds of estates.

The Solicitor-General: The hon. and gallant Member for East Grinstead (Colonel Clarke) was really answering an argument advanced by my hon. Friend the Member for Chesterfield (Mr. Benson), who said that there was no reason for differentiation between agricultural property and other property, and the hon. and gallant Member says there is. We have already had our Debate on agricultural property and my right hon. Friend the Financial Secretary, in answering it, pointed out that there is what we regard as a substantial difference made between the two in that a reduction of 45 per cent. is made in the case of agricultural property. So I do not feel that I can add usefully to what has been said having regard to the fact that we continue the distinction in favour of agricultural property.
The hon. and gallant Member for Central Glasgow (Colonel Hutchison) kindly

gave me notice that he would raise the point he made. Where an estate includes frozen assets overseas, Estate Duty is levied if and in so far as there are sufficient assets in this country to cover the Estate Duty on the whole estate. However, if and in so far as the assets in this country are insufficient to cover the portion of the Estate Duty attributable to the frozen assets overseas, that portion is not collected until the assets become unfrozen. That, of course, does not arise under the provisions of anything we are doing here, and the hon. and gallant Gentleman was asking a question as to the effect of the general law. Nothing we are doing here touches that position.

Mr. Stanley: I agree that it is not strictly relevant to what we are doing now, but we hope to have an opportunity of raising this matter again on the Report stage because it seems that the beneficiary is being treated harshly where he may be left without a penny because he has overseas a certain amount of money that he cannot touch. I am sure it is a matter that the House ought to consider, and in those circumstances, we shall try to devise some Amendment on Report stage which will enable us to raise it.

Mr. Benson: I want to refer to the incidence of Death Duties. Where there is a change in the rate as the estate gets larger, there is one point at which the increase attracts a tax of 100 per cent. It is entirely inequitable and it is thoroughly untidy, and it goes right through the scale. To give two small examples, a small estate of £10,000 is subject to 4 per cent., but above £10,000 it is subject to 6 per cent. An estate of £10,000 pays £400 tax and the residue is £9,600. If a man leaves £10,212, he comes into the 6 per cent. range with the proviso that he does not actually lose, but that the £212 above the £10,000 bears 100 per cent. tax and the larger estate, when the tax is paid, is exactly the same size as the smallest.
To take a larger example, an estate of £60,000 is subject to a tax of 35 per cent. and when that is paid there is left £39,000. Anybody leaving £65,000 is subject to 40 per cent. tax, and when that is paid it leaves as residue exactly the same amount as the estate of £60,000, that is £39,000. The reason why that happens is that the whole of the estate is assessed for Death Duties at the one rate. Surtax assessment is more equitable for, in the


various steps, it is not the whole of the income which is assessed for the higher rate, but the increased income band. Why cannot the same principle be adopted for Death Duties?

Mr. Spearman: I wish briefly to draw the attention of the Chancellor to the hardship involved where an estate declines from the date of death to the date of sale. I shall illustrate this simply by an extreme case. A man dies on 1st January leaving an estate to the value of £1 million. It is not possible to sell that until 1st March, by which time it may be possible to realise only £800,000. That will mean that the heir will get nothing at all with which to pay the expenses, so he will be worse off with the estate he has inherited. The delay in selling the estate may be no fault of the heir. It may occur quite apart from the legal delay in getting probate, because if the estate consists of shares largely in one company, it takes a long time to sell those shares, especially in markets such as we have at present.
The Chancellor may say that it works out on an average because if the price goes up, the estate gains, having paid a smaller amount of Death Duty than it would otherwise have paid; but neither I nor the Committee could accept that argument because the scales are weighted against the estate. The very fact of trying to sell the shares brings the price down and, therefore, creates an artificial position against the owner. Secondly, even if one man gains, that is no consolation to the man who loses. That seems just about as fair as when the judge said, "The justice in my country is admirably administered. It is quite true that six men who were not guilty were hanged. On the other hand, six men who were guilty got off. Justice, therefore, was done on the average." That seems to be applicable to the hardship in the present case.
I realise that hon. and right hon. Gentlemen opposite may have very little sympathy with large estates; of course, this question applies particularly to the large estates. But I assume that, even so, they do not wish the State to take more than the pound of flesh to which it is entitled; and when the State, in its wisdom or unwisdom, decides to take a very large share indeed of an estate it

is up to the State to devise methods by which it makes quite sure that no more is taken than has been legally agreed upon in this House of Commons.

Mr. Pickthorn: I do not apologise for returning to the point about Death Duties as between kin and when property passes to strangers. I do not wish to be quarrelsome about it, but I think that the Solicitor-General and the Financial Secretary to the Treasury themselves would agree that they were not at their very plainest. I do not apologise, therefore, if I did not wholly understand the matter and their explanations of it at the end. But if I have got it anything like right, surely the effect of the Clause is that for the first time in our history—and the history of the matter is far older than the Death Duties; it goes back to the times of the heriots and reliefs and all that—for the first time in our history property passing upon death is going to be equally heavily hit by the Crown whether it passes within the family or outside it.

The Deputy-Chairman: I understood that the right hon. Gentleman the Member for the City of London (Mr. Assheton) had indicated to the Chair that he and his hon. Friends would have a wide Debate on the Amendment in his name and that no Debate would be continued upon the same point on the Motion, "That the Clause stand part of the Bill."

Mr. Assheton: When the discussion was opened those of us then present agreed that it would be a convenient way of discussing the matter to have a general Debate upon the first Amendment.

Mr. Pickthorn: I am not quite sure, Mr. Bowles, whether it is a point of Order or a point of decency upon which you are pulling me up. In either case, I am willing at once to give way. I have sat throughout the Debate except for one minute. I do not think I have been out of the Chamber for more than one minute and if during that minute the leaders of my party gave an assurance that this matter would not be raised at this stage then, of course, I will continue no further; but I really have not been out of the Chamber for more than a minute or two at the very beginning of the Debate, and I certainly heard no announcement of this sort nor did I know that it was a matter of Order.

The Deputy-Chairman: It is not a matter of Order. I was merely pointing out that some kind of arrangement had been reached between, I think, the right hon. Gentleman the Member for the City of London and the Chair—I was not occupying it at the time—at the beginning of his speech on his own Amendment.

Mr. Stanley: Whilst we want to get through the Debate, on the other hand no one wishes to prevent my hon. Friend the Member for Cambridge University (Mr. Pickthorn) from developing a point to which he attaches importance. I think it was, in fact, generally agreed that we would not prolong the Debate on the Motion, "That the Clause stand part of the Bill."

Mr. Pickthorn: I have listened throughout the Debate and as I say, I was not out of the Chamber for more than a minute. I am sorry I missed hearing what was said. What I want to know is, whether, if that is the right meaning of the Clause—and I think it is—that is not a very great change in our law; and, if so, whether, even now, and in spite of all these reasons for hurry, the Treasury Bench does not feel it some kind of a duty to indicate what is the reason for that change in the law. We have had no reason on that point at all. We had the point that £20

million was wanted; that is quite understandable, but it is not relevant. Apart from that, we had merely the Solicitor-General's as near as possible simultaneous argument (a) that it is very hard on the penniless aunt of a millionaire to have to pay Death Duties, and (b) that it is very hard upon the son who inherits most of the matter if he has to pay it. That is the only argument we have been given so far.

6.45 p.m.

I do not believe that anybody on the other side imagines there is any great proportion of voters in this country who really think that there should be no distinction whatever between the family and strangers in the matter of the passing of property at death. I quite understand the belief that there should be no passing of property at death—that I can fully understand; but that there should be no distinction in the passing of property at death in the case where it passes to strangers and the case where it passes to close relatives is, I believe, an opinion shared by no one else in this country. The Treasury Bench really ought to have given us some kind of a case for it.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 235; Noes, 101.

Division No 178.]
AYES
[6.48 p.m.


Acland, Sir Richard
Carmichael, James
Follick, M.


Adams, Richard (Balham)
Chamberlain, R. A.
Foot, M. M.


Albu, A. H.
Champion, A. J.
Forman, J. C.


Allen, A. C. (Bosworth)
Chater, D.
Fraser, T. (Hamilton)


Alpass, J. H.
Chetwynd, G. R.
Gibbins, J.


Anderson, A. (Motherwell)
Cluse, W. S.
Gilzean, A.


Attewell, H. C.
Collick, P.
Glanville, J. E. (Consett)


Austin, H. Lewis
Collindridge, F.
Gooch, E. G.


Awbery, S. S.
Collins, V. J.
Goodrich, H. E.


Ayles, W. H.
Colman, Miss G. M.
Grenfell, D. R.


Ayrton Gould, Mrs. B.
Corlett, Dr. J.
Grey, C. F.


Balfour, A.
Cove, W. G.
Grierson, E.


Barstow, P. G.
Cripps, Rt. Hon. Sir S.
Griffiths, D. (Rother Valley)


Barton, C.
Daggar, G.
Griffiths, Rt. Hon. J. (Llanelly)


Battley, J. R.
Daines, P.
Griffiths, W. D. (Moss Side)


Bechervaise, A. E.
Dalton, Rt. Hon. H.
Gunter, R. J.


Benson, G.
Davies, Edward (Burslem)
Guy, W. H.


Beswick, F.
Davies, Haydn (St. Pancras, S. W.)
Hall, Rt. Hon. Glenvil


Bavan, Rt. Hon A. (Ebbw Vale)
Davies, R. J. (Westhoughton)
Hamilton Lieut-Col. R.


Binns, J.
Deer, G.
Hardy, E. A.


Blackburn, A. R.
Delargy, H. J.
Hastings, Dr. Somerville


Blenkinsop, A.
Diamond, J.
Haworth, J.


Blyton, W. R.
Dobbie, W.
Hobson, C. R.


Bottomley, A. G.
Dodds, N. N.
Holman, P.


Bowden, Fig. Offr. H. W.
Donovan, T.
Holmes, H. E. (Hemsworth)


Braddock, Mrs. E. M. (L'pl, Exch'ge)
Driberg, T. E. N.
Horabin, T. L.


Braddock, T. (Mitcham)
Dugdale, J. (W. Bromwich)
Houghton, A. L. N. D.


Brook, D. (Halifax)
Dye, S.
Hoy, J.


Brooks, T. J. (Rothwell)
Ede, Rt. Hon. J. C.
Hudson, J. H. (Ealing, W.)


Broughton, Dr. A. D. D.
Edelman, M.
Hughes, Hector (Aberdeen, N.)


Brown, T. J. (Ince)
Evans, John (Ogmore)
Hughes, H. D. (W'lverh'ton, W.)


Brown, W. J. (Rugby)
Ewart, R.
Hutchinson, H. L. (Rusholme)


Burden, T. W.
Fairhurst, F.
Irvine, A. J. (Liverpool)


Burke, W. A.
Farthing, W. J.
Irving, W. J. (Tottenham, N.)


Butler, H. W. (Hackney, S.)
Fernyhough, E.
Jay, D. P. T.




Jeger, G. (Winchester)
Neal, H. (Claycross)
Sylvester, G. O.


Jeger, Dr. S. W. (St. Pancras, S. E.)
Nichol, Mrs. M. E. (Bradford, N.)
Symonds, A. L.


Jones, D. T. (Hartlepool)
Oldfield, W. H.
Taylor, R. J. (Morpeth)


Jones, J. H. (Bolton)
Oliver, G. H.
Taylor, Dr. S. (Barnet)


Jones, P. Asterley (Hitchin)
Orbach, M.
Thomas, D. E. (Aberdare)


Keenan, W.
Paling, Will T. (Dewsbury)
Thomas, George (Cardiff)


King, E. M.
Pargiter, G. A.
Thomas, I. O. (Wrekin)


Kinghorn, Sqn.-Ldr. E.
Parker, J.
Thorneycroft, Harry (Clayton)


Kinley, J.
Paton, Mrs. F. (Rushcliffe)
Thurtle, Ernest


Kirby, B. V.
Paton, J. (Norwich)
Titterington, M. F.


Lee, F. (Hulme)
Pearson, A.
Tolley, L.


Leonard, W.
Peart, T. F.
Tomlinson, Rt. Hon. G.


Leslie, J. R.
Poole, Cecil (Lichfield)
Turner-Samuels, M.


Levy, B. W.
Popplewell, E.
Viant, S. P.


Lewis, J. (Bolton)
Porter, E. (Warrington)
Wadsworth, G.


Lindgren, G. S.
Porter, G. (Leeds)
Walker, G. H.


Lipton, Lt.-Col. M.
Proctor, W. T.
Wallace, G. D. (Chislehurst)


Logan, D. G.
Purvey, Comdr. H.
Walking, T. E.


Longdon, F.
Randall, H. E.
Weitzman, D.


Lyne, A. W.
Ranger, J.
Wells, P. L. (Faversham)


McAdam, W.
Reid, T. (Swindon)
Wells, W. T. (Walsall)


McAllister, G.
Rhodes, H.
West, D. G.


McGhee, H. G.
Roberts, Goronwy (Caernarvonshire)
Wheatley, Rt. Hon. John (Edinb'gh, E.)


Mack, J. D.
Robertson, J. J. (Berwick)
White, H. (Derbyshire, N. E.)


McKay, J. (Wallsend)
Robinson, Kenneth (St. Pancras, N.)
Whiteley, Rt. Hon. W.


Mackay, R. W. G. (Hull, N. W.)
Rogers, G. H. R.
Wilkes, L.


McLeavy, F.
Ross, William (Kilmarnock)
Wilkins, W. A.


MacPherson, Malcolm (Stirling)
Royle, C.
Willey, F. T. (Sunderland)


Mainwaring, W. H.
Sharp, Granville
Willey, O. G. (Cleveland)


Mallalieu, J. P. W. (Huddersfield)
Shawcross, C. N. (Widnes)
Williams, D. J. (Neath)


Mann, Mrs. J.
Shurmer, P.
Williams, J. L. (Kelvingrove)


Mayhew, C. P.
Silverman, J. (Erdington)
Williams, Ronald (Wigan)


Mellish, R. J.
Silverman, S. S. (Nelson)
Williams, W. T. (Hammersmith, S.)


Mikardo, Ian
Simmons, C. J.
Williams, W. R. (Heston)


Millington, Wing-Comdr. E. R.
Skinnard, F. W.
Willis, E.


Mitchison, G. R.
Smith, C. (Colchester)
Wilmot, Rt. Hon. J.


Monslow, W.
Smith, S. H. (Hull, S. W.)
Woodburn, Rt. Hon. A.


Moody, A. S.
Snow, J. W.
Wyatt, W.


Morris, Lt.-Col. H. (Sheffield, C.)
Sorensen, R. W.
Yates, V. F.


Morris, P. (Swansea, W.)
Soskice, Rt. Hon. Sir Frank
Young, Sir R. (Newton)


Mort, D. L.
Sparks, J. A.



Moyle, A.
Stewart, Michael (Fulham, E.)
TELLERS FOR THE AYES:


Murray, J. D.
Stross, Dr. B.
Mr. Joseph Henderson and


Nally, W.
Stubbs, A. E.
Mr. Hannan.


Naylor, T. E.
Summerskill, Rt. Hon. Edith





NOES


Agnew, Cmdr. P. G.
Gridley, Sir A.
Noble, Comdr. A. H. P.


Assheton, Rt. Hon. R.
Grimston, R. V.
Nutting, Anthony


Astor, Hon. M.
Hannon, Sir P. (Moseley)
Odey, G. W.


Baldwin, A. E.
Harden, J. R. E.
Peake, Rt. Hon. O.


Beamish, Maj. T. V. H.
Hare, Hon. J. H. (Woodbridge)
Peto, Brig. C. H. M.


Birch, Nigel
Harris, F. W. (Croydon, N.)
Pickthorn, K.


Boles, Lt.-Col. D. C. (Wells)
Headlam, Lieut.-Col. Rt. Hon. Sir C.
Rayner, Brig. R.


Boothby, R.
Hinchingbrooke, Viscount
Reed, Sir S. (Aylesbury)


Bower, N.
Hogg, Hon. Q.
Roberts, H. (Handsworth)


Braithwaite, Lt.-Comdr. J. G.
Hope, Lord J.
Robertson, Sir D. (Streatham)


Bromley-Davenport, Lt.-Col. W.
Howard, Hon. A.
Robinson, Roland (Blackpool, S.)


Butcher, H. W.
Hurd, A.
Ropner, Col. L.


Challen, C.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Ross, Sir R. D. (Londonderry)


Clarke, Col. R. S.
Hutchison, Col. J. R. (Glasgow, C.)
Savory, Prof. D. L.


Conant, Maj. R. J. E.
Jeffreys, General Sir G.
Spearman, A. C. M.


Cooper-Key, E. M.
Keeling, E. H.
Stanley, Rt. Hon. O.


Crookshank, Capt. Rt. Hon. H. F. C.
Kendall, W. D.
Strauss, Henry (English Universities)


Crosthwaite-Eyre, Col. O. E.
Lambert, Hon. G.
Sutcliffe, H.


Crowder, Capt. John E.
Lancaster, Col. C. G.
Taylor, C. S. (Eastbourne)


Cuthbert, W. N.
Lindsay, M. (Solihull)
Taylor, Vice-Adm. E. A. (P'dd't'n, S.)


Darling, Sir W. Y.
Lloyd, Selwyn (Wirral)
Thomas, Ivor (Keighley)


Drayson, G. B.
Low, A. R. W.
Thornton-Kemsley, C. N.


Drewe, C.
Lucas-Tooth, Sir H.
Turton, R. H.


Dugdale, Maj. Sir T. (Richmond)
MacAndrew, Col. Sir C.
Watt, Sir G. S. Harvie


Duthie, W. S.
McFarlane, C. S.
Webbe, Sir H. (Abbey)


Eccles, D. M.
Mackeson, Brig. H. R.
White, J. B. (Canterbury)


Eden, Rt. Hon. A.
Maclay, Hon. J. S.
Williams, C. (Torquay)


Erroll, F. J.
Maclean, F. H. R. (Lancaster)
Williams, Gerald (Tonbridge)


Fletcher, W. (Bury)
MacLeod, J.
Winterton, Rt. Hon. Earl


Foster, J. G. (Northwich)
Maitland, Comdr. J. W.
York, C.


Fraser, H. C. P. (Stone)
Mellor, Sir J.
Young, Sir A. S. L. (Parlick)


Fraser, Sir I. (Lonsdale)
Moore, Lt.-Col. Sir T.



Fyfe, Rt. Hon. Sir D. P. M.
Morris, Hopkin (Carmarthen)
TELLERS FOR THE NOES:


Galbraith, Cmdr. T. D. (Pollok)
Mott-Radclyffe, C. E.
Colonel Wheatley and


Gammans, L. D.
Neven-Spence, Sir B.
Mr. Wingfield Digby.


Question put, and agreed to.

Clause ordered to stand part of the Bill.

Clause 25.—(ALLOWANCE FOR, OR REPAYMENT OF, LEGACY OR SUCCESSION DUTY PAID ON CAPITAL OF SETTLED FUND.)

The Solicitor-General: I beg to move in page 17, line 29, to leave out "successive."
This is a drafting change. On further consideration we thought the wording used might exclude some cases for relief intended to be included in the Clause. Clause 25 provides for proportionate relief from payment of the new Estate Duty in the case where Succession Duty has been paid on the capital value of a settlement. That would be the case where settled property passes through various persons each of whom is liable at the same rate of Succession Duty; for example, if it goes through the hands of several brothers liable at 10 per cent. We seek to leave out the word "successive" because that might exclude from relief given by the Clause the case, for example, in which a settlement provides for an annuity payable to "A" with the residue of the income to go to "B." It may be said that in that case there was contemporaneous interest and not successive interest. We seek to leave out "successive" so that that kind of case would not be excluded from the benefits conferred on the taxpayer by the Clause.

Amendment agreed to.

The Solicitor-General: I beg to move, in page 18, line 24, to leave out "the whole," and to insert "any."
This Amendment has almost exactly the same purpose as the last Amendment. It makes sure that in a case in which a certain amount of property is taken out of settlement that it is not excluded from the scope of the Clause. The word "whole" might exclude cases where after the settlement was made, some of the property could be taken out of the settlement.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clause 26 ordered to stand part of the Bill.

Clause 27.—(EXEMPTION FROM ESTATE DUTY OF MAINTENANCE FUNDS GIVEN TO NATIONAL TRUST.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. Henry Strauss: In view of the anxiety to make good progress with this Bill, I shall not delay the Committee more than a minute or two, but I think it would be inappropriate to pass the Clause without someone expressing on behalf of the National Trust our appreciation that the law is being improved in this way. The Clause is of great importance and the Chancellor of the Exchequer has shown that he, at any rate, realises the valuable work that the National Trust is doing. I hope he will convey to his colleague in charge of another Bill that view of the National Trust, because it is not held by all his colleagues to quite the same extent that he shows he holds it, by this very welcome Clause.

Mr. Keeling: I wish to endorse what my hon. and learned Friend the Member for Combined English Universities (Mr. H. Strauss) has said. May we take it that property exempted from Estate Duty by this Clause will not, for the purpose of determining the rate of Estate Duty, be aggregated with other property passing at the death?

7.0 p.m.

Mr. Glenvil Hall: Speaking on behalf of my right hon. and learned Friend, I would say that he is delighted that this Clause has received such universal support and is commended in quarters which normally do not look favourably on what he does. In reply to the hon. Member for Twickenham (Mr. Keeling), these gifts are not aggregated.

Clause ordered to stand part of the Bill.

Clause 28.—(EXTENSION OF RELIEF ON COMPULSORY ACQUISITIONS.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. C. Williams: May I ask for some explanation of this Clause? This is a rather complicated matter which is becoming of more interest to a larger number of people. Would the Chancellor or some Member of the Treasury Bench kindly explain where we are under this Clause and what is the necessity for its being in the Bill?

The Solicitor-General: This Clause extends the time during which relief can be granted from Estate Duty in the following circumstances. Supposing land was valued at a certain figure and was subsequently compulsorily acquired at a lesser sum, relief from payment of Estate Duty could be granted proportionately to the extent to which the compulsory acquisition price was less than the value which had been accepted for the purposes of Estate Duty. This Clause extends the period to the period which is provided for under the Town and Country Planning Act, namely to the end of 1953, during which, in order to eliminate scarcity value, a notional lease is assumed to exist.
Under the Town and Country Planning Act, 1947, current values were substituted for 1939 values, but in order that, for purposes of compulsory acquisition of land the State or the acquiring authority should not have to pay a scarcity value, it is deemed that the land is subject to a lease which is due to expire at the end of 1953. That is provided in order to reduce, by eliminating scarcity value, the value of the land which it is proposed to quire. This Clause extends the provisi for relief in the payment of Estate Duty to cover the period in which it is deemed, under the Town and Country Planning Act, a notional lease exists.

Mr. C. Williams: Under that Act certain people have to make a claim, and those claims have to be made by the end of this month. Those making the claim do not know what is the value of their land or whether the claim will be accepted. Does this Clause deal with that matter, or is it dealt with elsewhere in the Bill? I think that the right hon. and learned Gentleman is covering the point but it is one which should be made certain. How is the case of such people dealt with?

The Solicitor-General: This Bill does not affect that matter at all. The claims which have to be made by the end of this month are claims against the £300 million, which is the global figure of compensation to be paid to owners in respect of the loss of development value of their land. I was speaking about the elimination of scarcity value for the purposes of compulsory acquisition. So

that the acquiring authority does not have to pay a scarcity value in acquiring land this notional lease is assumed, under the 1947 Act, to exist. The development value and the claim which has to be in by the end of the month is a different matter because land can only be disposed of in future at existing use value and the owners have lost something in respect of which they should have compensation.

Mr. W. J. Brown: If the Solicitor-General has not covered the point which has just been made by the hon. Member for Torquay (Mr. C. Williams), will he say where it is covered? I ask him to envisage what might happen. Supposing a man dies in possession of a piece of property in regard to which he or his lawyer has staked a claim for development rights. It is true that that claim is one against the global sum of £300 million. It is also true that that claim has some value as part of the estate. On his death the estate has to be wound up, but it may be a long time before the sum is recoverable from the £300 million global fund, and what is recovered may bear no relation to the claim which has been made. The figure of that claim will presumably be the figure taken for the assessment of Death Duty at the time of death.
It might conceivably happen that a man has a piece of property with a development right which his lawyer assesses at £1,000. A claim is put in for that amount, and Death Duty is presumably levied on that figure as representing part of the estate, and yet two or three years later it may emerge that there will be paid from the central fund in respect of that property not £1,000 but perhaps £200 or £300. Plainly, something should be done about that. If that is not dealt with in this Clause, would the Solicitor-General tell us where in the Bill or elsewhere that point will be dealt with?

The Solicitor-General: The position in regard to such a claim and the value to be put upon it is the same as that in regard to any other claim which forms part of the assets of the estate. Supposing the man has made a claim, that claim is valued to see what is a fair value to be put on it. The claim would be on the same footing as any other claim.

Mr. Brown: Except that in this case the State is the beneficiary under both heads. I cannot imagine that the Exchequer is entitled to charge the executors Death Duty on £1,000, which is paid to the State and subsequently for the State to pay only £250 in relation to that precise consideration. The right hon. and learned Gentleman would not rob the estate of £750 in that way, would he? Or would he?

The Solicitor-General: The claim may turn out to be more or less in value than the figure at which it is valued, according to which the estate will benefit or otherwise.

Mr. Brown: Does the right hon. and learned Gentleman suppose that the State will give from the £300 million more than the claim which is advanced? I find that difficult to believe. Even if that were so would not the Government require from the estate additional Estate Duty in regard to the increased figure?

Mr. Assheton: Cannot the Solicitor-General give the assurance, which is the fact, that when the amount of the claim is ascertained, and finally settled, the estate will be adjusted accordingly and the duty adjusted accordingly?

Mr. C. Williams: I feel that a large sum of money depends on this matter. It is a difficult point and is one which may never have occurred to the right hon. and learned Gentleman. I should be perfectly satisfied, as I think would my Friends on this side of the Committee, if we could be assured that the point will be thoroughly gone into because it will be most unfair if Death Duties are to be valued on the claim. It is an entirely new position affecting a large number of people. It looks as if no one knows what is the position in regard to such a claim. If we can have an assurance that between now and the Report stage this matter can be gone into so that the unfair position raised by the hon. Member for Rugby (Mr. W. J. Brown) shall not arise, that will meet the point about which I am worried. It is a very real point, as has now been seen.

The Solicitor-General: I speak subject to correction, but I have drawn inspiration from the experts in the box, and if I understand the position, what happens is that the executors or administrators of

the estate are informed that payment of Estate Duty in regard to the claim can be left outstanding until the claim is finally settled.

Mr. Williams: If that is really so one must accept it, but it is not a very happy position. Apparently there is no real certainty in the Treasury on this matter. I hope that we shall see that that point is made certain.

Clause ordered to stand part of the Bill.

Clause 29.—(EXTENSION OF EXEMPTION FOR SMALL GIFTS INTER VIVOS.)

Mr. Assheton: I beg to move, in page 21, line 9, to leave out from "amount," to the end of the Clause, and to add:
if the following condition is satisfied, namely, that bona fide possession of enjoyment of the property so taken was assumed by the donee immediately upon the gift and thenceforth retained to the entire exclusion of the deceased or of any benefit to him by contract or otherwise.
(2) Where in the case of any donee such gifts do not exceed in the aggregate five hundred pounds in value or in amount and bona fide possession or enjoyment of some but not all of the property so taken was assumed by the donee immediately upon the gift and thenceforth retained to the entire exclusion of the deceased or of any benefit to him by contract or otherwise, the foregoing subsection shall apply to the gift or gifts of which such possession or enjoyment was so taken or assumed and retained but not to the other or others.
Here I gather the Government are extending the exemption of small inter vivos gifts from £100 to £500. My Amendment seeks to make clear what I do not think is clear from the Clause, that if such a gift is out of settled or unsettled property it will equally get the benefit of this concession.

Mr. Glenvil Hall: The answer is that in making this change my right hon. and learned Friend has in mind small gifts up to the sum of £500 and to include interests in settled property would, in his view, be going beyond the scope of what he has in mind. There is really no ground for exempting gifts which form the subject of formal settlements. If the right hon. Gentleman is thinking of settlements that form part of a marriage settlement, they are dealt with already, and do not come into this.

Mr. Assheton: I wish the right hon. Gentleman to make this clear. Suppose


a man or a woman is tenant for life of a marriage settlement and wishes to release the sum of £200 in favour of a daughter. Would the release of that £200 get the benefit of this exemption or not?

Mr. Glenvil Hall: It gets exemption under another Finance Act altogether. Where a marriage settlement takes place, it is assumed, and properly so, that the gift, if a gift of this kind passes, is made in consideration of the marriage. Therefore, it does not come into this Clause at all. It is dealt with under another Finance Act and would be exempted.

Mr. Assheton: I do not think the right hon. Gentleman is quite right. The question of consideration of marriage does not affect this matter. I am discussing a position where a man or woman is tenant for life of a settlement and that man or woman wishes to hand over to his child, or any other person who happens to be within the terms of the settlement, a sum of £200. It would be perfectly reasonable and should think in accordance with the wishes of this Committee, that such a release should be treated in exactly the same way as if the same person had been able to hand over £200 to the same individual out of his private estate. I cannot believe the Committee would wish the matter to be left in its present position, but if that is the case, I would press this Amendment. If, however, the right hon. Gentleman will assure me that he will look into the matter before the Report stage I shall be glad to ask leave to withdraw.

Mr. Glenvil Hall: All I can say is that gifts made in consideration of marriage are already covered under a previous enactment. If the type of gift envisaged by the right hon. Gentleman is not of that kind all I can say is, it is not exempted and it is not the intention of my right hon. Friend to exempt it.

Mr. Stanley: I regard the answer of the right hon. Gentleman as wholly un

satisfactory. I can quite see that it is in the interests of the Government, in the discharge of their responsibility, to put a monetary limit upon the extent of the gifts to which this exemption applies. But I cannot see, and no attempt has been made to explain, why we should draw a distinction between the same sum of money which a man hands to a child out of his free capital or out of settled capital. I cannot see why the sum should not come out of settled capital as out of free capital, and no attempt has been made to explain why it is that a gift made out of free capital is perfectly harmless and can draw exemption, while a gift made out of settled capital is in some way so obnoxious that it is not entitled to exemption. Unless we can be given some clear explanation, I shall ask my hon. Friends to press for a Division.

Mr. C. Williams: I think I can give an explanation. A man can give a gift out of free capital to a naughty lady but he can only give settled capital in all probability, to relatives. This is just another instance of the Government's attack on the family. Where money is settled on the family and is family money, the right hon. and learned Gentleman puts a special burden on it. This is rather a cute little way of once again attacking the family in this Bill. I think that is the natural explanation, short of the Government having an answer. We know the Government are going out of their way, even in these small things, to attack the family rather than the individual who may make a gift to some friend outside the family. It is a shocking position, but those of us who know the Government expect them to do these things.

Question put, "That the words proposed to be left out, stand part of the Clause."

The Committee divided: Ayes, 250; Noes, 102.

Division No. 179.]
AYES
[7.15 p.m.


Acland, Sir Richard
Balfour, A.
Blyton, W. R.


Adams, Richard (Balham)
Barstow, P. G.
Bottomley, A. G.


Albu, A. H.
Barton, C.
Bowden, Fig.-Offr. H. W.


Allen, A. C. (Bosworth)
Battley, J. R.
Braddock, Mrs. E. M. (L'pl, Exch'ge)


Alpass, J. H.
Bechervaise, A. E.
Braddock, T. (Mitcham)


Anderson, A. (Motherwell)
Benson, G.
Brook, D. (Halifax)


Attewell, H. C.
Berry, H.
Brooks, T. J. (Rothwell)


Austin, H. Lewis
Beswick, F.
Broughton, Dr. A. D. D.


Awbery, S. S.
Bevan, Rt. Hon. A. (Ebbw Vale)
Brown, T. J. (Ince)


Ayles, W. H.
Binns, J.
Burden, T. W.


Ayrton Gould, Mrs. B.
Blackburn, A. R.
Burke, W. A.


Baird, J.
Blenkinsop, A.
Butter, H. W. (Hackney, S.)




Carmichael, James
Hughes, H. D. (W'lverh'pton, W.)
Ranger, J.


Castle, Mrs. B. A.
Hutchinson, H. L. (Rusholme)
Reid, T. (Swindon)


Chamberlain, R. A.
Irvine, A. J. (Liverpool)
Rhodes, H.


Champion, A. J.
Irving, W. J. (Tottenham, N.)
Roberts, Goronwy (Caernarvonshire)


Chater, D.
Jay, D. P. T.
Robertson, J. J. (Berwick)


Chetwynd, G. R.
Jeger, G. (Winchester)
Robinson, Kenneth (St. Pancras, N.)


Cluse, W. S.
Jeger, Dr. S. W. (St. Pancras, S. E.)
Rogers, G. H. R.


Collick, P.
Jones, D. T. (Hartlepool)
Ross, William (Kilmarnock)


Collindridge, F.
Jones, Elwyn (Plaistow)
Royle, C.


Collins, V. J.
Jones, J. H. (Bolton)
Scott-Elliot, W.


Colman, Miss G. M.
Jones, P. Asterley (Hitchin)
Sharp, Granville


Corbet, Mrs. F. K. (Camb'well, N. W.)
Keenan, W.
Shurmer, P.


Corlett, Dr. J.
King, E. M.
Silverman, J. (Erdington)


Cove, W. G.
Kinghorn, Sqn.-Ldr. E.
Silverman, S. S. (Nelson)


Cripps, Rt. Hon. Sir S.
Kinley, J.
Simmons, C. J.


Daggar, G.
Kirby, B. V.
Skinnard, F. W.


Daines, P.
Lee, F. (Hulme)
Smith, C. (Colchester)


Dalton, Rt. Hon. H.
Leonard, W.
Smith, S. H. (Hull, S. W.)


Davies, Edward (Burslem)
Leslie, J. R.
Snow, J. W.


Davies, Haydn (St. Pancras, S. W.)
Levy, B. W.
Sorensen, R. W.


Davies, R. J. (Westhoughton)
Lewis, J. (Bolton)
Soskice, Rt. Hon. Sir Frank


Deer, G.
Lindgren, G. S.
Sparks, J. A.


Delargy, H. J.
Lipton, Lt.-Col M.
Stewart, Michael (Fulham, E.)


Diamond, J.
Logan, D. G.
Stokes, R. R.


Dobbie, W.
Longden, F.
Stross, Dr. B.


Dodds, N. N.
Lyne, A. W.
Stubbs, A. E.


Donovan, T.
McAdam, W.
Summerskill, Rt. Hon. Edith


Driberg, T. E. N.
McAllister, G.
Sylvester, G. O.


Dugdale, J. (W. Bromwich)
McEntee, V. La T.
Symonds, A. L.


Dye, S.
McGhee, H. G.
Taylor, R. J. (Morpeth)


Ede, Rt. Hon. J. C.
Mack, J. D.
Taylor, Dr. S. (Barnet)


Edelman, M.
McKay, J. (Wallsend)
Thomas, D. E. (Aberdare)


Edwards, W. J. (Whitechapel)
Mackay, R. W. G. (Hull, N. W.)
Thomas, George (Cardiff)


Evans, John (Ogmore)
McLeavy, F.
Thomas, I. O. (Wrekin)


Evans, S. N. (Wednesbury)
MacPherson, Malcolm (Stirling)
Thorneycroft, Harry (Clayton)


Ewart, R.
Mainwaring, W. H.
Titterington, M. F.


Fairhurst, F.
Mallalieu, J. P. W. (Huddersfield)
Tolley, L.


Farthing, W. J.
Mann, Mrs. J.
Tomlinson, Rt. Hon. G.


Field, Capt. W. J.
Mayhew, C. P.
Turner-Samuels, M.


Follick, M.
Mellish, R. J.
Viant, S. P.


Foot, M. M.
Middleton, Mrs. L.
Wadsworth, G.


Forman, J. C.
Mikardo, Ian
Walker, G. H.


Fraser, T. (Hamilton)
Millington, Wing-Comdr. E. R.
Wallace, G. D. (Chislehurst)


George, Lady M. Lloyd (Anglesey)
Mitchison, G. R.
Watkins, T. E.


Gibbins, J.
Monslow, W.
Weitzman, D.


Gibson, C. W.
Moody, A. S.
Wells, P. L. (Faversham)


Gilzean, A.
Morris, Lt.-Col. H. (Sheffield, C.)
Wells, W. T. (Walsall)


Glanville, J. E. (Consott)
Morris, P. (Swansea, W.)
West, D. G.


Gooch, E. G.
Mort, D. L.
Wheatley, Rt. Hon. John (Edin'gh, E.)


Goodrich, H. E.
Moyle, A.
White, H. (Derbyshire N. E.)


Grenfell, D. R.
Murray, J. D.
Whiteley, Rt. Hon. W.


Grey, C. F.
Nally, W.
Wilkes, L.


Grierson, E.
Naylor, T. E.
Wilkins, W. A.


Griffiths, D. (Rother Valley)
Neal, H. (Claycross)
Willey, F. T. (Sunderland)


Griffiths, Rt. Hon. J. (Llanelly)
Nichol, Mrs. M. E. (Bradford, N.)
Willey, O. G. (Cleveland)


Griffiths, W. D. (Moss Side)
Oldfield, W. H.
Williams, D. J. (Neath)


Gunter, R. J.
Oliver, G. H.
Williams, J. L. (Kelvingrove)


Guy, W. H.
Orbach, M.
Williams, Ronald (Wigan)


Hall, Rt. Hon. Glenvil
Paling, Will T. (Dewsbury)
Williams, Rt. Hon. T. (Don Valley)


Hamilton, Lieut.-Col. R.
Palmer, A. M. F.
Williams, W. T. (Hammersmith, S.)


Hardy, E. A.
Pargiter, G. A.
Williams, W. R. (Heston)


Hastings, Dr. Somerville.
Parker, J.
Willis, E.


Haworth, J.
Paton, Mrs. F. (Rushcliffe)
Wills, Mrs. E. A.


Henderson, Rt. Hn. A. (Kingswinford)
Paton, J. (Norwich)
Wilmot, Rt. Hon. J.


Herbison, Miss M.
Pearson, A.
Woodburn, Rt. Hon. A.


Hobson, C. R.
Peart, T. F.
Wyatt, W.


Holman, P.
Poole, Cecil (Lichfield)
Yates, V. F.


Holmes, H. E. (Hemsworth)
Popplewell, E.
Young, Sir R. (Newton)


Horabin, T. L.
Porter, E. (Warrington)



Houghton, A. L. N. D. (Sowerby)
Porter, G. (Leeds)
TELLERS FOR THE AYES:


Hoy, J.
Proctor, W. T.
Mr. Joseph Henderson and


Hudson, J. H. (Ealing, W.)
Pursey, Comdr. H.
Mr. Hannan.


Hughes, Hector (Aberdeen N.)
Randall, H. E.





NOES


Agnew, Cmdr. P. G.
Braithwaite, Lt.-Comdr. J. G.
Crockshank, Capt. Rt. Hon. H. F. C.


Assheton, Rt. Hon. R.
Bromley-Davenport, Lt-Col. W.
Crosthwaite-Eyre, Col. O. E.


Astor, Hon. M.
Brown, W. J. (Rugby)
Cuthbert, W. N.


Baldwin, A. E.
Buchan-Hepburn, P. G. T.
Darling, Sir W. Y.


Beamish, Maj. T. V. H.
Butcher, H. W.
Digby, Simon Wingfield


Birch, Nigel
Challen, C.
Drayson, G. B.


Boles, Lt.-Col. D. C. (Wells)
Clarke, Col. R. S.
Drewe, C.


Boothby, R.
Clifton-Brown, Lt.-Col. G.
Dugdale, Maj. Sir T. (Richmond)


Bower, N.
Conant, Maj. R. J. E.
Duthie, W. S.







Eccles, D. M.
Lambert, Hon. G.
Robinson, Roland (Blackpool, S.)


Erroll, F. J.
Lancaster, Col. C. G.
Ropner, Col. L.


Fletcher, W. (Bury)
Legge-Bourke, Maj. E. A. H.
Ross, Sir R. D. (Londonderry)


Foster, J. G. (Northwich)
Lindsay, M. (Solihull)
Sanderson, Sir F.


Fraser, H. C. P. (Stone)
Lloyd, Selwyn (Wirral)
Savory, Prof. D. L.


Fraser, Sir I. (Lonsdale)
Lucas, Major Sir J.
Spearman, A. C. M.


Fyfe, Rt. Hon. Sir D. P. M.
MacAndrew, Col. Sir C.
Stanley, Rt. Hon. O.


Galbraith, Cmdr. T. D. (Polick)
McFarlane, C. S.
Strauss, Henry (English Universities)


Gammans, L. D.
Maclay, Hon. J. S.
Sutcliffe, H.


Grimston, R. V.
Maclean, F. H. R. (Lancaster)
Taylor, C. S. (Eastbourne)


Hannon, Sir P. (Moseley)
MacLeod, J.
Taylor, Vice-Adm. E. A. (P'dd't'n, S.)


Harden, J. R. E.
Maitland, Comdr. J. W.
Thomas, Ivor (Keighley)


Harris, F. W. (Croydon, N.)
Mellor, Sir J.
Touche, G. C.


Harvey, Air-Comdre, A. V.
Moore, Lt.-Col. Sir T.
Turton, R. H.


Headlam, Lieut.-Col. Rt. Hon. Sir. C.
Morrison, Rt. Hon. W. S. (Cirencester)
Wakefield, Sir W. W.


Hinchingbrooke, Viscount
Mott-Radclyffe, C. E.
Watt, Sir G. S. Harvie


Hogg, Hon. Q.
Neven-Spence, Sir B.
Webbe, Sir H. (Abbey)


Hollis, M. C.
Noble, Comdr. A. H. P.
White, J. B. (Canterbury)


Hope, Lord J.
Nulling, Anthony
Williams, C. (Torquay)


Howard, Hon. A.
Odey, G. W.
Williams, Gerald (Tonbridge)


Hurd, A.
Peake, Rt. Hon. O.
Winterton, Rt. Hon. Earl


Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)
Peto, Brig. C. H. M.
York, C.


Hutchison, Col. J. R. (Glasgow, C.)
Pickthorn, K.
Young, Sir A. S. L. (Partick)


Jeffreys, General Sir G.
Rayner, Brig. R.



Keeling, E. H.
Reed, Sir S. (Aylesbury)
TELLERS FOR THE NOES:


Kendall, W. D.
Roberts, H. (Handsworth)
Brigadier Mackeson and




Colonel Wheatley.


Question put, and agreed to.

Clause ordered to stand part of the Bill.

Clause 30.—(ABOLITION OF DUTY ON BONUS ISSUES OF SECURITIES.)

Motion made, and Question proposed. "That the Clause stand part of the Bill."

Mr. Stanley: The Financial Secretary to the Treasury complained earlier that we did not often enough congratulate the Chancellor of the Exchequer on what he does. I said then that we were always ready to congratulate the Chancellor when he was right: the trouble was that he was right so seldom. Here is another occasion where he is right and, therefore, we are prepared to congratulate him. I think that for the last two years we have taken every opportunity to point out the absurdity of the tax which is now being repealed. During the whole of that time no cogent arguments, except those of prejudice, have ever been advanced in favour of it. The Chancellor now says that it has served its purpose. No one could ever discover its purpose.
If bonus issues were undesirable then bonus issues could be stopped, and no doubt were stopped, by the Capital Issues Committee. The addition of this tax had no meaning at all. Therefore, we are glad that the Chancellor has taken this step. We would urge him once again to take as his maxim the indisputable fact that, if ever he is in a dilemma, if he chooses the course exactly opposite to that adopted by his predecessor as Chancellor of the Exchequer, he can always be certain that he will be right.

Mr. Ronald Chamberlain: The Government Front Bench might well have expected that little bouquet. I am sorry if I am not throwing what could be described as a bouquet, but at least the Chancellor knows that he has the most enthusiastic support of hon. Members opposite. I suppose that I must also apologise for breaking into the pleasant little timetable arranged between the Government and the Opposition. However, there are rights for hon. Members other than those on the Government and Opposition Front Benches, and that is why I propose to make a few remarks on this Clause.
I want to ask why at this time of stringency and difficulty the Chancellor should elect to make this concession? He is making it at a time when he calls generally, and rightly, for sacrifices from the people. Why does he choose this moment to annul a duty which falls certainly not on the working classes—it is not something from which they have to be relieved—but on the better off—and in many cases the moneyed interests? I appreciate that there are exceptions, but in general this is a duty which would be borne by the wealthier and by the moneyed interests.
7.30 p.m.
This step would be understandable if industry had been having a bad time or had been going through a thin period. I could understand then that the Chancellor might want to make some kind of concession to industrialists to help them over the stile. Whatever can be


said by the Opposition, or indeed by the Chancellor himself, nobody in any part of the Committee attempts to argue that industry and business generally has not had a royal, and indeed a golden, time for the last few years. Therefore, I cannot find a reason why industry needs help and assistance. If this was a Budget in which considerable concessions were being given to the workers, if there was a distribution of largess generally, perhaps we might then understand this concession being given at this time, but I think everybody without regard to Party agrees that this is an austere Budget. At a time when, so far from concessions being given to the people in the mass, new burdens in fact are being placed upon them, it seems entirely incomprehensible to me that that should be the moment when this bonus issue concession is made.
Whatever one may think about the technical merits or demerits of bonus issues, this at least is certain: these bonus issues, now coming out in full spate, are being given from reserves which were accumulated very largely during and since the war. After all, during the war period and during the period of blood and sweat and tears, great profits were made, as they always are during war-time, and, since the war, it has been a time of difficulty, necessity and shortage. Whether the great profits now being handed out in these bonus issues came from the period of the war or the period after the war, we know that in both cases they derive from the needs, the difficulties and the necessities of the people. They were prohibited in war-time. Why is it then, in a time which, financially and in many other ways, is almost as grave, they are not only allowed to have free sway, because that is what is happening, but that time is also chosen to end the small duty of 10 per cent., without any adequate reason being given?
The predecessor of the Chancellor of the Exchequer, the present Chancellor of the Duchy of Lancaster, described bonus issues in 1947 as "sheer money for jam." I know that the Chancellor of the Duchy is unpopular with the Opposition and I am glad of it and I honour him for it, for it is a very bad and dangerous thing when we have a Chancellor of the Exchequer who is popular with the Opposition.

The present Chancellor knows perfectly well, as does the Chancellor of the Duchy, that bonus issues, in general, are "sheer money for jam," but, whereas the Chancellor of the Duchy was quite frank and candid about it, the present Chancellor of the Exchequer is very far from frank and candid on the subject.
Since the announcement of this concession was made, I have taken some note of what has been its effect already, and I have here a list of no fewer than 50 cases of bonus issues, mainly on a large scale and going up to as much as £6 million, in the intervening 2½ months. In 39 of these cases, I have been able to trace the exact amount which has been handed over as "sheer money for jam," that is to say, the cases in which no money payment was made at all for the bonus issues. In these 39 cases, which are of the "sheer money for jam" type, I have ascertained that the amounts involved total up to about £14,250,000, which is being handed out to the shareholders. I suppose that, on that basis, the 50 cases might reasonably involve about £17 million handed out, but I know quite definitely that in these 39 cases the actual amount is £14,250,000. In fact, the real value of what is being distributed is greatly in excess of that, and I can readily prove it in regard to a number of the cases I have mentioned, with figures and information which I have here. In numbers of cases——

The Deputy-Chairman: I think the hon. Gentleman must not go into the amount involved. He may object to the duty being removed, but he cannot go into an explanation showing how many million pounds have been distributed in this way.

Mr. Chamberlain: I quite appreciate that, Mr. Bowles. I was only trying to illustrate what I think is a valid point—that there has been this pent-up desire to give out this "sheer money for jam." It has been held up until now, but now it is coming out in full force—in one case to which I have referred it is to the extent of £6 million.

The Deputy-Chairman: I must ask the hon. Gentleman not to continue on those lines any further.

Mr. Chamberlain: I will not go into further details, because I have already given particulars of the largest instance,


but I think I am entitled to say that the Chancellor of the Exchequer estimated that his loss of revenue would be about a million pounds in the current year. I think I am also entitled to say that the bonus issues already handed out represent far more than a million pounds, although I know that he might well argue that these amounts would not have been handed out if the 10 per cent. duty had not been removed. If my right hon. and learned Friend argues that way, then I would say that it makes the case worse than ever, because all this largess has been held up until the moment arrives when the Chancellor, no doubt on the advice and with the pressure of City interests, removes this duty. Now the flood is in full spate, and I want to know why it has been allowed.
The Chancellor, in his Budget speech, gave his reason for his action, and if the right hon. Gentleman the Member for West Bristol (Mr. Stanley) does not know the reason, it is quite clearly given in this passage. The Chancellor, speaking of this 10 per cent. duty, said:
That duty has, I think, performed the task of controlling bonus issues when the ban was first relaxed, for which purpose it was very properly imposed, and it can now advantageously be discontinued. In future, such issues will be controlled in the same way as any other form of capital issue."—[OFFICIAL REPORT, 6th April, 1949; Vol. 463, c. 2088.]
One thing is very clear, and that is that the Chancellor said that "it can now advantageously be discontinued." Advantageously to whom? To the big vested interests, certainly to the City of London, for I think we can see here the pressure of the City interests on the Chancellor of this Labour Government. Is it really true that this little duty, at this time of difficulty and stringency, can now "advantageously be discontinued?" The Chancellor went on to say that these issues will be controlled in the same way as any other form of capital issue. What we know clearly about the work of the Capital Issues Committee is that it does not properly and adequately control the matter at all. If the Chancellor now says that we do not now need this control but that he can rely on the control of the Capital Issues Committee, my comment is that it is no control at all, and the spate of 50 issues to which I have referred already shows quite clearly that the thing has become virtually uncontrolled.
I regret to have to make this criticism, particularly after the delightful bouquet which the right hon. Gentleman the Member for West Bristol handed to the Government, but I hold very strongly, and I am sure every real Socialist does, in the light of the facts which I have already given, that the cancellation of this duty is entirely unjustified at the present time and will inevitably lead to inflation and to swollen prices, because, in case after case, of which I have the records here, it has been quite clearly intimated that the same level of dividends will hold good after this watering of capital. If that is not largess, if it is not a measure of inflation, and if it does not lead to swollen prices, I just do not know what does.
Furthermore, there is the actual loss of revenue. We may dissent as to the amount involved, which the Chancellor himself estimated at a million pounds. I have already shown that it is far more than that, and that at a time when the Chancellor is looking here and there for little bits of revenue and putting little duties on match-boxes and such things. In my view, to allow this concession is entirely reprehensible and wrong. Taken all in all, I think it is entirely unfair to the bulk of the people, when they are told that they must surrender this and that, to have additional burdens placed upon them, and that this largess, however technically justifiable, should be given at this time. I know the argument about being technically justified, and I could talk of many other things that are technically justified, but the Chancellor is refusing to do these other things because he says the time is not ripe. What about the people with Post-war Credits who want them encashed? They have been told that although they have a right to have them encashed, that right cannot be exercised at the moment. But this technical right of these companies to water their capital is conceded, and, in all the circumstances, I think a good deal of explanation about the whole matter is called for before some of us will be satisfied.

Mr. Braddock: When my attention was drawn to the fact that this was really a proposal for taking off 10 per cent. of the taxation on bonus issues. I was extremely surprised. I had heard about the putting on of 10 per cent. in


connection with the pools betting, but I did not hear a great deal of protest about this 10 per cent. on bonus shares except, of course, from hon. Members opposite, from whom we always expect to hear protests although, as a matter of fact, we do not take very much notice of what they say. On the other hand, we do take notice of what we hear in our constituencies and throughout the country. So far as my constituency is concerned, I had quite a number of letters about the 10 per cent. being put on pools betting, but I did not get a single letter about the 10 per cent. placed on bonus shares. I really thought that the Chancellor was putting on another 10 per cent., and I fully approved of such action. I was astonished to find that I was wrong. It seems to me after about 20 years in the movement an extraordinary thing that a Socialist Government with a Left-Wing Chancellor of the Exchequer, the chap who wanted to hoist the Red Flag over Buckingham Palace, can do a thing like this.

Mr. Nally: The phrase, "hoist the Red Flag over Buckingham Palace," was used by a gentleman who has been dead for many years, and the present Chancellor of the Exchequer is certainly not dead.

Mr. Braddock: He may not be dead as a Socialist, but it certainly seems to me that he is dying as a Left-Wing Socialist. However, I accept the correction, although I think my hon. Friend well knows that the phrase has been fathered on my right hon. and learned Friend more than once. In any case, I do not know that it is not true; after all there is a housing shortage, and there are a lot of spare rooms there. My hon. Friend ought not to have interrupted me; he has put me off.
I can quite understand right hon. Gentlemen opposite approving of this Motion, but that very fact makes me exceedingly suspicious. Throughout my short membership of this Parliament, I have never found myself able to go into the Division Lobby on the few occasions when Members of the Government Front Bench and right hon. Gentlemen opposite have been mixed up together. It sometimes seems to me, in my elementary way, that there might be some good reason for

the fraternisation, but, as a matter of fact, my feet just will not carry me into the same Lobby as that used by Opposition Members. I do not feel convinced by the arguments put forward by the Opposition this evening. Their spokesman suggested that the Capital Issues Committee could always control this matter, but, if my investigations are correct, the Coalition Government in May, 1940, totally prohibited the issue of bonus bonds. That committee only came into the picture when some sort of cash consideration was attached to the transaction. Therefore, I do not think that right hon. Gentlemen opposite have quite got the full story in regard to this particular matter.
It seems to me an extraordinary situation that here in 1949, for the first time since 1940, this Parliament is giving up all control with regard to this matter. It was not until the Budget of April, 1947, that the ban was relaxed, and it was only relaxed on the clear understanding that there should be a 10 per cent. duty on bonus issues. That was the price exacted by the Labour Government for the concession they gave with regard to the Measures passed by the Coalition Government. Speaking on 7th June, 1948, the present Chancellor of the Exchequer indicated that, in his opinion, it might be suitable to impose some restrictions of this sort during a period of potential inflation, but that when we had emerged from that period it might be possible to discontinue that type of measure.
7.45 p.m.
I ask the Government whether, in their opinion, we are now running out of the period of "potential inflation." Is that really the Chancellor's case? I think we are entitled to be told because, as I said, in 1948 the Chancellor advocated this sort of legislation because of the danger of inflation. Are we to understand that, because this duty has been withdrawn, there is no longer any danger of inflation in this country? If that is the case, then I fully agree with what was said by my hon. Friend the Member for Norwood (Mr. Chamberlain). In my opinion, there are a great many more worthy recipients of a bonus of this sort than the people who issue bonus shares. My hon. Friend the Member for Norwood mentioned the people holding post-war credits and the fact that the


Chancellor had more than once said that he could not repay those credits at the present time. It seems to me that he might well have kept on this 10 per cent. duty on bonus issues and repaid some of the Post-war Credits.

Mr. John Lewis: Has it occurred to my hon. Friend that it may be the Chancellor's object to encourage bonus issues because, in their absence, it might well be that money which in other circumstances would be reinvested in the company and put to reserve would be distributed by way of dividends?

Mr. Braddock: That may be the explanation of the attitude of the Chancellor, but, if it is, it seems a most extraordinary one. It is not the sort of argument to which I should have expected the Chancellor to agree in view of the country's present situation. But the argument does not only apply to Postwar Credits; there is also the question of the Purchase Tax which is levied on a considerable number of commodities.

The Temporary Chairman (Mr. Burden): I am sure the hon. Member will appreciate that he cannot discuss the Purchase Tax.

Mr. Braddock: I was only using it as an example, and if we are not allowed to use that sort of example, how can we drive home our point? However, I think the Committee quite understands what I was saying. There is a number of people in this country who could do with a million or so far more, and could use it far better, than the people who are to receive the advantage of the relief of duty on these bonus shares.
I do not propose to say very much more because I understand that there is some sort of timetable in respect of speeches. I certainly do not wish to stay here until three in the morning if it can possibly be avoided, but, of course, if it is to the advantage of the country, and if the Committee think that the country can be better governed by our staying here until the early hours of the morning, I am quite willing to stay. Before sitting down, I wish to quote a passage from a speech of the previous Chancellor of the Exchequer—not the Left-Wing Chancellor but the ordinary Chancellor—which he made on 23rd April, 1947.

He was defending the imposition of this tax. What he said is true, and I think it will appeal to the people of this country. It appealed to them then. It appealed to the Members on this side of the Committee at that time, even to the junior Member for Bolton (Mr. J. Lewis). He said this:
Is it not really better that I should have put a tax on bonus shares if that is one way in which we can get relief for the families of the Income Tax payers?"—[OFFICIAL REPORT, 23rd April, 1947; Vol. 436, c. 1200.]
That is just as true today as it was in 1947, and I very much regret that it is a Labour Chancellor of the Exchequer who is taking action of this sort. It is unnecessary, it is dangerous and it disregards the needs of the ordinary people of this country.

Mr. Glenvil Hall: I think I can reassure both the proposer of this Amendment and my hon. Friend the Member for Mitcham (Mr. Braddock).

Mr. Stanley: We are not discussing the Amendment.

Mr. Glenvil Hall: There was an Amendment on the Order Paper, and I was unaware that my hon. Friend the Member for Norwood (Mr. Chamberlain) was not speaking to the Amendment.

Mr. Chamberlain: There was an Amendment, and as I understood that it was not to be called I made my speech on the Question "That the Clause stand part." It amounts to the same thing.

Mr. Glenvil Hall: I should like to reassure both my hon. Friends that no pressure has been brought by the City on my right hon. and learned Friend the Chancellor of the Exchequer, and that if they know anything of his character they should feel assured that even if such pressure were brought it would have no effect upon him whatsoever. He would treat this matter purely on its merits, and I can assure the Committee that that is exactly what he has done.
I could talk on this subject for quite a long time and I am positive that even if I did I should not succeed in convincing either of my hon. Friends. However, I would say that this tax right from the beginning has not been looked upon as the kind of tax that one would retain before any other. So long as we get the revenue that we desire and so long as it is just and fair, I see no


reason why this tax should be retained simply because certain people think that it should be kept on the Statute Book. It was extremely useful at the time when it was levied by my right hon. Friend the Chancellor of the Duchy of Lancaster, a period which one might describe as a time of boom; but I should like to say this—and this is all I really have to say—that we still have in existence the Capital Issues Committee, that it is extremely active, that when applications are made to it it judges those applications on their merits, and that it is quite immaterial to the Capital Issues Committee whether this extra stamp tax on bonus issues is in existence or not.
All that we have done and all that we are doing by repealing Sections 60 to 62 of the Finance Act, 1947, is to bring once more into the free area the raising, by those who desire, of £50,000. Anything above that, in spite of this Clause, will still have to go to the Capital Issues Committee, and that Committee will carry through, as it has done up to now, the policy laid down by the Government with regard to these issues. I think, therefore, that what my right hon. and learned Friend is doing is not in any sense a going back on his beliefs as a Socialist Chancellor of the Exchequer, neither does it mean that he has poured money into the laps of vested interests, as has been alleged—far from it.

Mr. Chamberlain: Is not my right hon. Friend aware that there has been a definite spate and flood of these things since this matter was announced, and does he not agree that it is purely inflationary and a strong tendency to high prices?

Mr. Gallacher: There is one thing I would like the Minister to deal with. He heard my hon. Friend the Member for Mitcham (Mr. Braddock) read out what had been said by the previous Chancellor of the Exchequer as the reason for maintaining this 10 per cent. When the Chancellor of the Duchy of Lancaster was Chancellor of the Exchequer and he made that speech he had the full backing of the Financial Secretary and the full backing and enthusiastic cheers of hon. Members on this side of the Committee. There is not the slightest doubt about that. Can the

Financial Secretary now tell us that the situation has changed in this country from what it was as described by the then Chancellor of the Exchequer in the speech which has been quoted by my hon. Friend? My hon. Friend the Member for East Coventry (Mr. Crossman) on Thursday last told us that there had been a Socialist revolution in this country and that the bonus shares, which had been referred to by the hon. Member for Birmingham——

Mr. Chamberlain: Norwood.

Mr. Gallacher: I beg the hon. Member's pardon. I always associate the name "Chamberlain" with Birmingham. The facts that he put before us here made it clear that the Socialist revolution that has taken place has been of a very peculiar character. I want the Financial Secretary to say whether he accepts this fiction which was presented by the hon. Member for East Coventry, or whether he is of the opinion that the situation described by the then Chancellor, who is now Chancellor of the Duchy, as contained in the quotation made by my hon. Friend on my right—the hon. Member for Norwood, who is pretty much to the left—applies to the conditions today, or whether those conditions have changed and that quotation does not apply any more. Are there not, as the then Chancellor said, more deserving methods of giving taxation relief than the method proposed in this Clause? Would the Minister say what it has cost him to change from his support of the previous Chancellor to the support of the present Chancellor?

Clause ordered to stand part of the Bill.

Clauses 31 to 33 ordered to stand part of the Bill.

Clause 34.—(EXONERATION OF CERTAIN PROPERTIES.)

Mr. Assheton: I beg to move in page 25, line 12, to leave out "ten shillings," and to insert "one pound."
The Amendment is very simple. I know the Committee are aware that Land Tax is a very complicated affair, but I am not sure that the Committee are aware in what a frightful muddle Land Tax assessments are. In every Income


Tax office up and down the country Land Tax assessments are in such a muddle that nobody knows on what particular bit of land the tax is assessed. The proposal to do away with the tax is very desirable.
The Chancellor has proposed that all assessments under 10s. should be completely disposed of at once. I suggest that 10s. should be raised to £1 because that would include a very large number of small assessments, and would save the Inland Revenue, a large number of lawyers and private individuals an immense amount of time and trouble. I hope the Financial Secretary will see fit to accept the Amendment because I can assure him that it was put down only with the view of helping the Board of Inland Revenue. I do not think it would cost the Government anything at all. Probably they would be in pocket as a consequence of accepting it.

8.0 p.m.

The Solicitor-General: The reason for abolishing the Land Tax where it is not in excess of 10s. is that it is not worth while collecting it. The cases in which it is less than 10s. are 700,000 out of 1,100,000 assessments and, therefore, there is a strong case for saying that if it does not mean a loss to the Revenue, if the tax is not worth collecting, then it should be abolished altogether; and that applies to the figure of 10s.
That cannot be said, however, when we get above 10s. It cannot be said that it is not worth collecting at figures between 10s. and £1. The redemption value for Land Tax of £1 is £25. It would cost the Treasury something like £75,000 a year if the Amendment were accepted and, therefore, we feel that we cannot fairly go above 10s. If we did go above 10s. then landowners who have redeemed their Land Tax in excess of that and have paid 25 years' capital redemption sum to redeem it, might have a grievance, because they would have paid quite a substantial sum to redeem it. For those reasons we have fixed a level which takes out 700,000 of the 1,100,000 and we cannot go further.

Mr. Assheton: I was not pressing the right hon. and learned Gentleman to go further if it meant a loss of revenue. I believe it would save a lot of money. I

do not believe that the argument which the right hon. and learned Gentleman has put forward is a very convincing one because I do not think he appreciates the amount of work involved and the frightful muddle which now exists. Possibly we could pursue the matter on the Report stage and because I know the Committee is most anxious to get on with the business, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Sir Basil Neven-Spence: I beg to move, in page 25, line 19, at the end, to insert—
(d) all properties comprised in the countries of Orkney and Shetland.
Hon. Members who sit for Scottish constituencies are sometimes accused of taking an undue interest in the antiquarian side of politics. On occasions, in my capacity as a Chairman of the Scottish Standing Committee, I have had to recall them to the present. I am, therefore, all the more sorry tonight that I have to go right back to the year 872. Do not let hon. Members be alarmed, however; I hope the intervening centuries will melt away like snow in May, and I shall refer to nothing which is not strictly relevant to the Amendment.
In the year 872, Jarl Harald Haarfagr, who hon. Members doubtless met in their history books as Harald Fair Hair, subdued his brother Jarls in Norway and turned that country into a monarchy with himself as King. Orkney and Shetland were conquered at the same time. They had been settled about a couple of centuries earlier and they became part of King Harald's Norse domains. Orkney became an Earldom under Jarl Sigurd, whilst Shetland was ruled by a Foud or Governor directly responsible to the King of Norway. King Harald instituted throughout his Norse Domains, including Orkney and Shetland, a yearly Land Tax called Skat which was levied for the support of the State. It was not in any sense of the term a feudal duty because there could be no such thing in the Udal system of law and land tenure which then prevailed throughout the Norse domains. Such duties were entirely foreign to the Udal system.
Jarl Sigurd of Orkney and the Foud of Shetland were authorised to levy Skat, or Land Tax, in Orkney and Shetland and were specifically directed to apply it for


purposes of administration in the islands. This is borne out by various references in the Orkneyinga Saga and also by the expressly specified conditions under which the half-Norse, half-Scottish nobleman, Lord Henry St. Clair, obtained the Jarldom of Orkney from the King of Norway in 1379.

The Temporary Chairman (Mr. Burden): I am sure the hon. Member will appreciate that while he can refer to Skat by way of illustration, the merits or demerits of Skat cannot be discussed on this Amendment.

Sir B. Neven-Spence: I am not proposing to discuss the merits or demerits of Skat. I must refer to it, however, in order to make my case with regard to the Land Tax. Lord Henry St. Clair's accounts are still extant and they show that he gathered the Land Tax and applied it in the islands for its proper purpose. This continued until 1469, when Orkney and Shetland were pledged to the Scottish Crown by King Christian I of Norway, Denmark and Sweden in security for the unpaid balance of the dowry of Princess Margaret on her marriage to James I of Scotland.
At that time there was levied in Scotland a Land Tax known as the "Old Extent." This tax was not levied in Orkney and Shetland after these islands came under the Scottish Crown, doubtless because they were already paying a form of Land Tax, Skat. But in 1643, when the "Old Extent" was repealed in Scotland, a new Land Tax or Cess was introduced. That new tax was imposed in Orkney and Shetland in addition to the Land Tax or Skat which they were already paying, with the result that from 1643 down to the present day the islands have been paying a double Land Tax. That is why I put the Amendment on the Order Paper.
When these islands were pledged to the Scottish Crown the King of Norway stipulated that the Scots were not to interfere with the Norse laws and language and customs and the Udal system of land tenure which then prevailed in the islands. That is actually stipulated in an Act of the Scots Parliament in 1657, but it was more honoured in the breach than in the observance. During the first two centuries under the Scottish Crown, the Earldom lands were, to quote Balfour:

Granted, revoked, annexed and regranted, confiscated and re-annexed with wearisome monotony and torturing change. Five times they were formally annexed to the Crown by Acts of the Scots Parliament, and fourteen times were conceded in defiance of such Acts to one needy and rapacious courtier after another.
At length, in 1707, the then Earl of Morton procured a redeemable Crown grant which was made absolute in 1742. This grant embraced the lands which the Earl of Morton sold, in 1776, to Sir Laurence Dundas, ancester of the present Marquess of Zetland. The Grant to the Morton family conferred on them the right to levy Skat but failed to stipulate that it should be spent as it had been during the previous nine centuries, for the purposes of administration in the islands.
In the meantime, the udallers of Orkney and Shetland had never ceased to protest, since 1643, against the injustice of having to pay the Scots Land Tax in addition to the Norse Land Tax. These protests became more vigorous when the Donatories of the Scottish Crown not only treated Skat as part of their personal income, but greatly added to the burden by arbitrarily altering the long-established Norse weights and measures in their own favour. These protests continued for two centuries without redress and came to a head in 1835 when the matter was brought to the Court of Session in Scotland. The udallers based their case on the argument that the levying of the Norse Land Tax in Orkney and Shetland should have ceased in 1643 when the Scottish Land Tax was introduced. They said it should be either one or the other, but that it was utterly wrong to continue with both forms of taxation.
The Court held that the Earl's right to levy the tax was secured by prescription, since the tax had been paid to the Crown from 1643 to 1707, and from that time on to the Crown's Donatory without interruption. The decision may have been right in law, but it did not remove the essential injustice. The Crown should forthwith have remedied this by repealing either that or Land Tax.
It was very foolish of the Crown ever to have granted the right to a private citizen to collect a public tax and then to allow——

The Temporary Chairman: Order.

Sir B. Neven-Spence: Well, Mr. Burden, the Scottish Crown. It was


foolish to have granted to a private citizen and his successors the irredeemable right to collect a public tax and use it for his own private purposes. But having made that error it was indefensible on the part of the Crown to cover up its own folly by victimising the people of Orkney and Shetland.
This grievance has subsisted for over 300 years, and I can assure the right hon. and learned Gentleman that the islanders affected feel just as bitter today as their forbears did then. I hope the right hon. Gentleman does not think that this has been forgotten. There is in the Treasury a memorial which was lodged as late as 1921, and a further memorial was lodged with the Scottish National Development Council in 1939, so that I can assure him that it is a very live subject at the present day. It is a grievance which can to some extent be remedied though not wholly by accepting the Amendment which stands in my name. The grievance would not be wholly redressed because of the fact that the Norse Land Tax, which must remain as the law stands, is a far heavier burden than the Land Tax, which is the subject of this Amendment.
More than one half of the duties collected by the Earldom and the Crown consists of Skat, and the burden and other duties is so heavy that in many cases it even exceeds the rental of the lands. Here are a few examples for the year 1918. The lands of Tirlot in the Island of Westray with a gross rental of £138 15s. 9d. paid duties amounting to £161 9s. The land of Upper Scapa, St. Ola, with a gross rental of £60 paid duties amounting to £63 16s. 0d. The land of Fea in Orphir with a gross rental of £11 5s. paid duties amounting to £10 18s. 11d. the lands of Hoy with a gross rental of £387 5s. 6d. paid duties amounting to £306 14s. 2d. when it is remembered that more than half of these duties consisted of Skat which is obviously a far heavier burden than the land tax, it will be realised what a scandalous injustice it was to superimpose an additional form of Land Tax.
I have given my right hon. and learned Friend a golden opportunity to redress partially this 300 years' old grievance by exonerating from land tax all properties comprised in the counties of Orkney and Shetlands. I suggest, too, that the Crown

might well take steps to examine the whole position regarding the imposition of Skat, and see whether, perhaps in this Bill, some arrangement cannot be made whereby this grievous burden can be redeemed in the course of time on reasonable terms.

The Lord Advocate (Mr. John Wheatley): I am sure the Committee would like to congratulate the hon. Member for Orkney and Shetland (Sir B. Neven-Spence) on his historical researches. I should like to thank him for the compliment he paid to my right hon. and learned Friend the Chancellor of the Exchequer, because the hon. Gentleman obviously feels that an injustice is being suffered in the Orkney and Shetlands which has lasted for 300 years and which in 1921 and again in 1939 he sought to have removed by Governments of his own party. Apparently Chancellors of the Exchequer of the day were unwilling to yield to the blandishments of the hon. Gentleman, and yet he feels the present Chancellor of the Exchequer will remove this alleged injustice. It seems to me, after listening to his interesting speech, that he is going about this the wrong way if it is an injustice, because he said that a heavier burden by far is imposed by Skat than by the land tax. If that is so, he should lead a crusade for the abolition of the burden of Skat.

Sir B. Neven-Spence: That is just what I cannot do. It can only be done by the Government dealing with it.

The Lord Advocate: But he is asking the Government to go about it in the wrong way, because if he leads a crusade for the abolition of Skat and other curious land burdens in Scotland and elsewhere, he might find a certain amount of sympathy on this side of the Committee. This Amendment is not acceptable because it seeks to exclude all properties in the Counties of Orkney and Shetland and the majority of the tenures in Orkney and Shetland are not udal tenures but feudal tenures, and it would embrace the feudal tenures.

Sir B. Neven-Spence: If the right hon. and learned Gentleman looks up some of the observations of distinguished members of the Court of Session in the past he will find that the whole land retains its essential udal character. The granting of


feudal charters has not altered the fundamentally udal nature of land tenure in Orkney and Shetland.

8.15 p.m.

The Lord Advocate: There are feudal charters in existence which regulate the burden put upon the Islands of Orkney and Shetland, and they far exceed the tenures held under the alternative system of udal tenure. According to this Amendment the feudal tenures in these islands would be exempt from tax, although feudal tenures elsewhere in Scotland will be subject to the tax. That is indefensible. Even if it were the position that all tenures in the Orkney and Shelands were udal tenures, the difference between a udal and feudal tenure is not sufficient to justify any differentiation for land tax purposes. While Skat is not a feudal tenure it is, to all intents and purposes, commensurate with the burdens imposed by a feudal tenure——

Sir B. Neven-Spence: Sir B. Neven-Spence rose——

The Lord Advocate: I cannot give way again because the hon. Gentleman knows that this is a matter of principle. There would be no justification for giving exemption for one type of burden imposed on the land and not giving exemption for other types of burden. The logical result of this Amendment would be to exclude from the Land Tax altogether all kinds of land property in Scotland.
I would point out to the Committee that this tax as levied in the Orkney and Shetlands is not providing any great hardship in these islands. The total land tax in the islands, once it becomes operative, is only £427 per annum reduced to £325 per annum on the operation of that part of the Clause which excludes an assessment less than 10s. The £325 will be levied on 140 separate assessments and it is quite obvious that there is no great financial hardship to be suffered, particularly at a time when, as a result of other measures by this Government, these islands are in a properous position, more prosperous than they ever were before.

Colonel Hutchison: I want to say a word here, because it seems to me that the right hon. and learned Gentleman in the last few words gave the case away. He says that the amount of money at stake is extremely small, but he attempted earlier in his speech to say

that there was an injustice but that my hon. Friend the Member for Orkney and Shetland (Sir B. Neven-Spence) was going about it in the wrong way.

The Lord Advocate: I am sure the hon. and gallant Gentleman does not wish to misrepresent me. I did not admit that there was an injustice. I said, if there was an injustice as alleged by the hon. Gentleman, but I was not admitting that there was any.

Colonel Hutchison: There is a slight difference between what I said and what the right hon. and learned Gentleman has said. However, be that as it may, the position is that it is undoubtedly an injustice to have double taxation however insignificant a double taxation may be. He went on to say that my hon. Friend should not have attacked it in this way, but that he should have dealt with another tax. My hon. Friend says that it is not possible for him to do that, but it is possible for the Government to take action. The solution seems to be a simple one. The Skat tax should be abolished and an injustice would be removed from these islanders.

Amendment negatived.

Clause ordered to stand part of the Bill.

Clauses 35 to 39 ordered to stand part of the Bill.

Clause 40.—(INTERPRETATION OF PART V.)

Sir S. Cripps: I beg to move, in page 30, line 6, to leave out, "or the Duchy of Lancaster."
This Amendment is a correction of a minor flaw in the provisions of the Clause, which includes among the Crown property the property of the Duchy of Lancaster. As a matter of fact, however, the Duchy of Lancaster has paid Land Tax, and has always redeemed it when required, and should not have been included. The Chancellor of the Duchy has been consulted upon it and he agrees to the omission of these words and, therefore, the inclusion of the Duchy of Lancaster as an ordinary citizen who will pay the redemption money.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

Clauses 41 to 44 ordered to stand part of the Bill.

Clause 45.—(EXTENSION OF SPECIAL CONTRIBUTION TO NORTHERN IRELAND.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Sir Ronald Ross: The Clause extends and makes legal the extension of the Special Contribution to Northern Ireland. I understand that without the Clause the Special Contribution would not be legal in Northern Ireland because it was not one of those taxes which were reserved taxes as laid down in the Act of 1920. In Northern Ireland, we have always been prepared to agree to bear our share of all the burdens of the United Kingdom, and there has been no protest at the extension of this tax to Northern Ireland.
On the other hand, there is a very real objection, in that the tax is not legal until this Bill be passed, and that when it is collected, those who pay it will have to pay interest for a period when the tax was not legally recoverable. That is not only a hardship on individual people but a legal blemish. After all, one should have some regard for the law. The tax does not become legally due from the people upon whom it falls until this Finance Bill is passed. They cannot legally pay it, I understand, until that happens. Nevertheless, the Treasury propose to take interest from them for not having paid it when they could not have done so without an infringement of the law.
In fact, it means an addition to the tax. The people who pay promptly do not have to pay any interest, and pay less than those who pay later, and who have to meet the rates of interest laid down. It is not a great sum of money, but it is a serious and significant thing that the present Government should envisage what seems to be a definite breaking of the legal tradition by trying to extract a comparatively small sum of money by subsequent legislation. There was no protest against the fact that we should bear an equal burden with the rest of the United Kingdom, but it is most unjust that this attempt should be made to make people pay interest for a period when they could not have paid the money. I very much hope that the Chancellor will consider that aspect of the matter. He has that conscience which the law produces in those who serve the law. It will

assist me in urging him to reconsider this matter and not to charge interest in this way.

Sir S. Cripps: Sir S. Cripps rose——

Mr. Stanley: I should like to be allowed to say a word. My hon. Friends will notice that there is an Amendment on the paper in the name of my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), dealing with exactly the same point. My hon. and learned Friend did not move the Amendment. In view of the time that we have taken, he thought that it would be better discussed upon the Report stage. I would point out to my hon. Friend the Member for Londonderry (Sir R. Ross) that the Amendment, when moved, will not only allow us to have an answer, but an answer upon the particular point which has now been raised, and it will give us an opportunity to divide upon it.

Sir R. Ross: In the circumstances, I do not wish to press the point now. I did not understand the position. The Amendment did not spring from us in Northern Ireland but from other Members independently. In the circumstances, I do not press the Chancellor for an answer now.

Clause ordered to stand part of the Bill.

Clauses 41 to 48 ordered to stand part of the Bill.

New Clause.—(REMISSION OF CUSTOMS DUTIES ON CERTAIN AIRCRAFT AND PARTS AND EQUIPMENT THEREFOR.)

(1) Subject to the following subsections, the Treasury may direct that duty shall not be chargeable under the Import Duties Act, 1932, or the Safeguarding of Industries Act, 1921, on the importation into the United Kingdom of any aircraft or aircraft parts or equipment to which this Section applies.

(2) The aircraft and aircraft parts and equipment to which this Section applies are any aircraft of wing span greater than one hundred and twenty feet and any spare part or equipmnt for incorporation in or use on such an aircraft, as respects which the Treasury are satisfied—

(a) in the case of any aircraft that it is to be used in maintaining overseas services; and
(b) in the case of any spare part or equipment that it is required for an aircraft manufactured outside the United Kingdom and used or to be used as aforesaid.

(3) The Treasury shall not exercise the powers conferred by this section except on the recommendation of the Board of Trade and on being satisfied that it is in the national interest that the duty should not be chargeable, and any directions of the Treasury under this Section may be given subject to such conditions as they think fit for restricting the use or disposal of the aircraft, aircraft parts or equipment and for enabling the Board of Trade to satisfy themselves that the conditions are complied with.

(4) The said powers shall also not be exercised except on an application made by the importer before delivery to him of the aircraft or aircraft parts or equipment.

(5) An application under the last foregoing subsection shall be made in writing and in accordance with such directions, if any, as may be given by the Treasury.

(6) Where any aircraft or aircraft parts or equipment are imported without payment of duty by virtue of directions of the Treasury under this Section, and any conditions attached to the directions are not complied with, then (without prejudice to any liability for duty) the aircraft or aircraft parts or equipment shall be forfeited.—[Mr. Jay.]

Brought up, and read for the First time.

8.30 p.m.

The Economic Secretary to the Treasury (Mr. Douglas Jay): I beg to move, "That the Clause be read a Second time."
The Clause is designed simply to give the Treasury power to exempt from Import Duty certain large types of aircraft imported into the United Kingdom, and also spare parts and equipment for those aircraft. The Clause has the purpose, which I am sure the whole Committee will support, of assisting our airlines to overcome the deficit which they have been incurring in recent years. We want to enable British airlines to compete on the international routes where their competitors have many advantages.
We shall not by this Clause be depriving the British aircraft industry of the protection which it has had against foreign imports since the Import Duties Act, 1932. The reason is that the Clause will only enable us to give the exemption in the case of aircraft of a wing span greater than 120 feet. As the Committee will probably realise, in practice this means simply Constellations and Stratocruisers used by B.O.A.C. Planes of that size are not at the moment manufactured by the British aircraft industry. If they were, foreign currency would not have been made available for importing them

from North America. The Treasury will give directions that duty should only be chargeable on a recommendation from the Board of Trade. Therefore, in our view the change will be of some value to British civil aviation and will not have any injurious effect on the British aircraft industry.

Mr. Selwyn Lloyd: Can the hon. Gentleman give an estimate of the cost?

Mr. Jay: It will be very small. I will let the hon. and learned Member have the exact figure later.

Clause read a Second time, and added to the Bill.

New Clause.—(FOOTBALLERS' BENEFITS.)

The money, commonly known as benefit, payable to professional footballers after a period of service, where not specifically guaranteed by contract, shall be exempted from Income Tax.—[Mr. Hollis.]

Brought up, and read the First time.

Mr. Hollis: I beg to move, "That the Clause be read a Second time."
This is a very small Clause as regards the amount of money involved which obviously cannot be more than something in the nature of £2,000 every year. It is obvious from the other hon. Members who have been good enough to write their names under mine that it is by no means a party issue. It clears up what I am sure the Committee will agree is a small anomaly, and I have great hopes that the Chancellor will allow that anomaly to be cleared up by accepting the Clause or by inserting a provision with similar effect.
Professional footballers are an admirable class of persons who give great pleasure to me, to many other hon. Members and to many millions of people throughout the country. I am in no sense pleading for any special favours for them and I am in no sense setting them up as such model citizens that they should be exempted from the normal incidence of Income Tax. I am simply asking that an anomaly be remedied. Most people make their living from a more or less steady income and can calculate roughly what they will spend each year, but certain people in various walks


of life make the bulk of their earnings over a very short period of time or in some cases on one occasion in their lives. There is nothing in the least unethical about that. In the past when Income Tax was at a very low level it raised no practical problem, but these days when Income Tax is at a very high level it raises a very great problem for these people if the bulk of their life savings, if it comes within one year, is liable to Income Tax.
There are a number of professions which suffer from that anomaly and included in them is the professional sportsman, who, by the nature of his working life, has to divide it into two parts. In the nature of things the professional sportsman has to stop playing his game long before he reaches the age when he wants to stop work. Therefore, the sensible system has been devised in football and cricket by which the professional sportsman receives a reasonable but not excessive remuneration for playing his game and, if he has achieved great distinction, when he gets towards the end of his playing career he is sometimes allowed to have what is called a benefit. The money from that benefit is not intended to be used, and is not used as income during that current year, but is used in order to give him a sum of money with which he can buy a shop or farm or establish himself in a public house or set himself up in whatever form of life he wishes for the second or non-playing period of his life.
I am putting forward two contentions. The first is that whatever may be the correctness of the technical decision of the courts that the benefit money counts as income, it is not income in any sense of the word but is a capital payment. Secondly, it is not in any real sense of the word a contractual payment but is much more in the nature of a personal gift. There is, in one of the curious anomalies of the law, a distinction between cricket professionals and football professionals on this point. Cricket professionals are allowed to have their benefits exempt from Income Tax. That was entirely due to the pertinacious public spirit of Mr. Seymour, the Kent batsman, who had a benefit in his match at Canterbury with Hampshire on which the Inland Revenue attempted to charge him Income Tax, and he so obstinately refused to

accept this ruling that he carried the matter right up to the House of Lords and eventually obtained exemption of Income Tax for cricketers.
When, however, similar tactics were attempted by a number of football professionals, particularly Mr. Harrison, who played for Everton, and Mr. Duff, who played for Manchester City, their Lordships were less amenable to footballers than to cricketers and they did not get exemption.

Mr. Randall: They belonged to the wrong team.

Mr. Hollis: That may well be. They all come from Lancashire without exception. It is not my intention to challenge the verdict of the law. The hon. and learned Member for East Leicester (Mr. Donovan) is in his place, and I hope he will intervene in this discussion so that if there are observations to be made about the law as it is now, they can be made with great authority by the hon. and learned Member. My intention is to put forward certain contentions about what, in my submission, the law should be. Doubtless these learned judges gave the correct interpretation of the law as it is now, but even the law as it is now cannot be as certain as all that, because there was a large variety of opinions and appeals and assenting judgment, so clearly it is in some doubt.
Indeed, oddly enough in both cases the lawyers were continually referring back to a somewhat distant parallel of clergymen's Easter offerings. The case seemed to turn on whether a footballer or cricketer was more like a clergyman, and it was decided on the whole that a footballer was more like a clergyman.

Mr. Nigel Birch: The other way round.

Mr. Hollis: No. However, neither of them in this respect was very much like a clergyman because, without wishing to raise the issue of Easter offerings about which I have strong views, those offerings are in the nature of income in the sense that they come in every year. As I understand them, the reasons why footballers were discriminated against in contradistinction to cricketers was that in the judgment on clergymen's Easter offerings we were told that clergymen got away with it if the Easter offering had been


peculiarly due to the personal qualities of the particular clergyman. It was decided that on the whole that was not so; that they were payments made to a person by virtue of his office rather than to a clergyman as a personal gift.
It was decided that the cricketer's benefit was more in the nature of a personal tribute from admirers and that the footballer's benefit was more in the nature of part of the regular remuneration of his profession. The clause in the Football League's contract which says that clubs may enter into agreements with players for a benefit was quoted as evidence that they had at least a semi-contractual right to this benefit; but the right was semi-contractual only in the most literal sense of the word, for only 53 per cent. of regular playing professional footballers do, in fact, get their benefit.
Benefits are of certain different natures and kind. There are occasions when it is a very little different from a regular payment. The club simply says to a player, "We will pay you so much money—£650." There are occasions when the footballer runs a private charity match of his own and gets the gate money in very much the same way that a cricketer does. In any event it is not for me, and it is not my wish, to challenge the interpretation of the law as it is now. I simply want to make the point, with which the Committee, I think, would agree, that if there are these differences between cricketers and footballers they are technical and legal differences. Doubtless the courts did their duty by interpreting the law as it was at the time or as it is now and paying attention to the technical difficulties; but it is equally our duty in this Committee, surely, to free the courts from this obligation of being tied down by a mere technicality and to put the football profession into a position where it can properly remunerate its players with benefits. This is as all-important in the football as in the cricketing world, because in the nature of things the playing life of a professional footballer is much shorter than that of the professional cricketer.
There is little doubt that there are ways in which, by changing words in contracts and in changing titles, these things can probably be got round without an amendment of the law, but I assure the Committee,

and I hope the Chancellor will agree, that it would be very much better to put the thing above board and beyond doubt rather than it should be left in this present extremely unsatisfactory condition. There is a general feeling of injustice that the Income Tax is being paid and continual attempts are being made in courts to use wording to get round this obligation. It is very much better that the Committee should take the opportunity of dealing frankly with the situation and put it beyond doubt.

Mr. J. P. W. Mallalieu: I am very glad indeed to be associated in the new Clause with somebody to whom on this occasion I can refer to as my hon. Friend the Member for Devizes (Mr. Hollis). He has put the case very clearly and fairly. Like him, I am no lawyer, and I should certainly hesitate to argue with anybody, particularly the Solictor-General and the Chancellor of the Exchequer, upon legal matters; but I would put just one or two legal questions before I come to my main point of underlining some of the points made by the hon. Member for Devizes.
8.45 p.m.
On the legal points, it seems that there is a strictly legal case for treating these benefits as capital rather than as income. They are, in the first place, a form of depreciation; of wear and tear on the footballer. There is considerable wear and tear on the footballer. Ordinary company profits like those of a coalmine or such things are strictly income, yet the Chancellor allows sums to be ploughed back to reduce taxation. Besides capital depreciation, there is also compensation because of the nature of the footballer's job. Nearly all professional football clubs insist that their players shall be fulltime footballers and not indulge in any other jobs outside. To compensate them for the disadvantage of not being able to learn a trade until they reach the age of 35, or even slightly later, this capital sum of money is set aside in the form of benefits and can be used to set up in business. I urge that the law should recognise these sums as being capital and not income.
I leave the legal argument for a ground on which I feel more secure, not the ground of legality but the ground of fairness and justice. The hon. Member for Devizes has mentioned that cricketers'


benefits are tax free, whereas footballers' benefits are not tax free. That leads to some of the most extraordinary anomalies. Those who are interested in cricket will remember that Bill Bowes, the famous Yorkshire fast bowler, had a benefit two years ago of £8,000. Cyril Washbrook, Lancashire's opening batsman, got a benefit last year of £13,000 and it is forecast that in the current year Denis Compton will get something in the nature of £20,000.
All those benefits are tax free. Yet in the past season five players of the Brighton and Hove Football Club who were granted a benefit in the form of a sort of charity match—the lowest service they had was 10 years and the highest 15 years—and they got, not £8,000, £13,000, or £20,000, but £300, and that £300 is not tax free, but subject to tax. That seems utterly ridiculous. An even more ridiculous instance relates to Denis Compton who, besides being a top-class cricketer, is also so good a footballer as to be almost worthy of playing for Huddersfield Town. Supposing he gets a benefit from Arsenal Football Club, that would be taxable, but, if the Arsenal Football Club decided to hand over to the cricketer Compton's benefit fund the sum of £700, that would be tax free.
There is an almost grosser case in a club very near to my heart, the Oldham Athletic Club. They have a player named Williamson, who has been on the books for 15 years. To recompense him for loss of efficiency, the club allowed him to organise a benefit match himself and took no part in the organisation, beyond lending him the ground. He arranged the benefit match, paid out of his own pocket the wages of players and received about £1,200. By league regulation he could not receive more than £900 and Oldham Athletic took the remainder. But, although he got only £900, he was subject to tax not only on £900, but on the £1,200, some of which he did not even get.
That kind of anomaly, of which there are dozens in the realm of sport is ridiculous and unjust. They tend to make people think the law is unfair and ridiculous and offers an inducement, as the hon. Member for Devizes said, for wangling round the law. Wangles can be done and it would be most unfortunate if they were done and the law brought into disrepute. I beg the Chancellor to consider accepting

this proposed new Clause in the interests of the players, but even more in the interests of the law, and most of all in the interests of common simple justice.

Sir Patrick Hannon: I should like to associate myself with the plea which has been made to the Chancellor for the adoption of this Clause. I happen to have been associated in a modest way for a long time with the football world, and I am president of a well-known football club. For years we have had to deal with cases of the kind envisaged in this new Clause. The Chancellor, with his great wisdom, judgment and all the fine Parliamentary and other qualities he possesses, ought not to allow an anomaly like this to continue as part of the structure of our sporting life, and I hope that he will pay heed to the plea which has been made by my hon. Friend the Member for Devizes (Mr. Hollis) and by the hon. Member for Huddersfield (Mr. J. P. W. Mallalieu).
The life of a footballer as such is limited, and the time comes when he has to be given some measure of compensation to make up for what one might call the depreciation of his efficiency in his profession of sport. In that situation, the benefit given to such a man ought not to be treated otherwise than as a gift. Under the present state of the law that position does not obtain, and I very much hope that the Chancellor will see the absurdity of a football player being placed in one category in relation to his sporting work and a cricketer being placed in a different category. I am sure that that is something to which the Chancellor would not like to be a permanent party, and I strongly support the plea which has been made from both sides of the Committee this evening.

Mr. Jay: The hon. Member for Devizes (Mr. Hollis) said that this was not a party question. Indeed, it is not; nor is it, I am afraid, a question of whether we are sympathetic to this claim on behalf of footballers, or whether they are deserving people. It is simply a question whether these benefits, which footballers receive on some specific occasion, are or are not income or remuneration for their services. If the benefits are income, or remuneration, we are bound under the law to tax them. We cannot


select one form of income and say that Income Tax should not apply to it. The question whether a given footballer's benefit is to be regarded as remuneration for his services or not is really one for the courts to determine, and any individual who wishes to contest his own case can do so in the courts.
I understand that this question has on several occasions been contested in the courts, and on all those occasions the court found in the case of footballers that the payment in question, benefit or whatever it was called, amounted to remuneration and income. If the courts find that, we are bound to impose the tax. I believe that in the case of cricketers the courts have come to a different conclusion. I do not intend to enter into the reasons for that now, but so long as the position is as I have stated, we are bound to impose tax accordingly. I do not think that we should here pass an amendment of the law which would in effect instruct the courts that one particular form of what they regarded as income was not to be so regarded for Income Tax purposes. Indeed, if we were to do so it would raise the question of whether that did not——

Sir P. Hannon: We are asking that Parliament shall take a course which will make it perfectly clear to the courts what interpretation is to be placed on the law. This House is superior to the judges so far as legislation is concerned.

Mr. Jay: Yes, but that would raise the question how widely the expression "commonly known as benefit," could be applied. It might be open to football clubs to apply that expression very widely. I do not think that the exemption could be extended too far in that direction. Even if we did make this exemption, it would produce a series of further anomalies in the other cases which have been mentioned—tips of waiters, etc. Therefore I think that whatever our opinion about the benefits to footballers, we must accept the principle that Income Tax applies to incomes, and must therefore apply to those individual cases where the courts think that the payment in question was remuneration for services.

Lieut.-Commander Braithwaite: This is one of the most astonishing replies ever delivered, even by the present

Government, and I cannot imagine hon. Members on either side of the Committee allowing the hon. Gentleman to get away with it, even for a moment. First of all, he tells us that this is a matter for the courts; that the cricketers' benefit has been so decided. So it was, after incredible litigation proceeding so far even as the House of Lords. That shows there was so much dubiety in the matter that it was arguable in legal circles. What on earth are we here for? To legislate. I do not think that even the Financial Secretary will deny that. My hon. Friend the Member for Devizes (Mr. Hollis) followed by the hon. Member for Huddersfield (Mr. J. P. W. Mallalieu) made out a perfectly clear case for the qualification of the law in this particular and very important subject. To be told that it would introduce anomalies; to be told that tips for waiters may come into the matters—as if forsooth, waiters had a benefit every ten years—well, I think the hon. Gentleman might have given us a more intelligent reply than that.
I am glad that this has been put on a strictly non-party basis, because we have had a valuable intervention from the hon. Member for Huddersfield possibly—I do not know—on the grounds of consanguinity. We all know his interest in this matter of professional football. May I say that I sincerely hope he will not get into disciplinary difficulties as a result of the speech he has made. After all, a Parliamentary private secretary can have his head cut off only once, and I was very glad to see the hon. Gentleman in such good form and speaking so valuably to us.
There are two main arguments in this matter. The first is that the law has ruled differently in the matter of cricketers and footballers—"the Seymour Case" as it was generally called—with regard to the beneficiary. We have already been told that the life of a professional footballer is very short, compared with that of a cricketer. I am informed that 12 seasons in first-class football is the average for a man who is able to keep his place in the first eleven. I have made inquiries, and I am told that that is a reasonable average. There are exceptions. Men like Billy Meredith, I believe, played for Manchester City and Manchester United for something like a quarter of a century. However, men of that kind are


exceptions, and the average for a footballer is 12 seasons in first-class football.
The first-class cricketer can go on very much longer by the nature of the game. We have been told by the hon. Member for Huddersfield of the case of Denis Compton. I had another name in mind: the famous Jack Sharpe—who was known as "Jack of both sides"—who played for England in both games, as Compton has done. In those days—and this may be the origin of some of the difficulty—benefits were much smaller and indeed taxation was very much lighter. Today the footballer who enjoys a benefit of £2,000 not only is subject to Income Tax, but in that financial year it brings him into the ambit of Surtax and imposes a very heavy burden indeed upon him.
The Economic Secretary said something else which, if I may say so, I thought was feeble. He said that this was not a particularly well-worded Amendment. I should have thought that it was clear enough and that it dealt with the main source of objection. The insertion of the words:
where not specifically guaranteed by contract,
is most important. If a man signs on for a club on the understanding that after four or five seasons he will receive a benefit, then I think the Chancellor is entitled to say that that was computed from the outset as part of his income.
9.0 p.m.
We are endeavouring to deal with cases where the benefit is a genuine reward for long and efficient service. It really is time that this matter was satisfactorily cleared up. If these words are imperfect, and they well may be, surely between now and Report stage the Government can look at the matter again, as is desired by both sides of the Committee, to see whether there is not a form of words which will cover this very simple position. This concession would cost the Exchequer very little indeed and it would put right what is a definite source of grievance. In reconsidering the matter, I beg the Economic Secretary not to confuse professional footballers with waiters.

Mr. J. Lewis: I wish to reinforce the pleas which have been made that my right hon. and learned Friend the Chancellor of the Exchequer should give further consideration to this point. I

confess that I was unable to follow the Economic Secretary to the Treasury when he told us that in cases where there are difficulties of interpretation the matter must be subjected to consideration by the courts and that ipso facto Parliament was not competent to make a decision quite clear. I may be wrong, and I stand to be corrected, but I believe that Parliament is competent to do what it likes with the law, and that in fact it is within the power of the Chancellor to express this Amendment in as clear words as possible in order to make application to the courts unnecessary.
We appreciate the point made by the Economic Secretary that if the money is income in the normal way then it is subject to taxation. We ask that this money should be considered as compensation for loss of efficiency or compensation in some other respect, in the same way that a person who is deprived of the opportunity of carrying on his employment as a result of an accident can get compensation which is not subject to Income Tax. I hope that the Chancellor will undertake to reconsider this question. If it went out from this Committee that the Government were of opinion that cricketers were entitled to have benefits free of Income Tax and footballers were not, that might lead to a misinterpretation of the attitude of the Government in the minds of the public.

The Chancellor of the Exchequer (Sir S. Cripps): I think that there is a little confusion on this subject. There has been no decision of the courts, and certainly none by the Government, that cricketers are entitled to tax-free benefit and footballers are not. The decision is that in one particular case the circumstances were held to be such that a cricketer did not have to pay Income Tax, and in four other cases the circumstances were held to be such that people who played football did have to pay. The law is exactly the same as regards both. Income Tax has to be paid upon income. Though this Committee is competent to legislate as it wishes, of course, it would be a very difficult process if we were to start to try to legislate for everything that is not considered to be income, which is what we are attempting to do if we pass this Amendment, because we do not really get very much further by saying:
Money, commonly known as benefit.…


That might cover anything. What in effect hon. Members are attempting to say in this Clause is that there shall be exempted all non-contractual or incidental payments received in the course of a person's employment or as a result of his holding of a position.
That is something very much wider than the footballer's benefit in the colloquial sense in which the word is understood, and I suggest that it would be quite impossible with fairness in legislation to define fully the circumstances of all non-contractual incidental payments. The benefit might be intended to be in one form. A payment to a jockey for winning a race may be another form, and indeed, there could be many forms of bonus. There could be bonuses paid to harvesters for harvesting, bonuses paid to employees for long terms of service, and all sorts and kind of moneys which are received as incidents of employment but which are not contractually provided for. To suggest that it would be satisfactory to say that there is a difference between that which is specifically guaranteed by contract and that which is not, is obviously nonsense. All one has to say to the fellow is, "I am not going to put it in your contract, but I assure you that you will get it, and it will be free of Income Tax." That would be ridiculous.

Lieut.-Commander Braithwaite: Is that not exactly what the courts have done? The right hon. and learned Gentleman has referred to the decision in favour of professional cricketers, but is the decision not reversed in the case of the footballers?

Sir S. Cripps: No. In the three cases of the footballers in 1941 there was no form of agreement in any of their cases. What I am saying is that a distinction to be drawn here between something which is specifically guaranteed in the contract and something which is not, is something quite unreal.

Mr. Godfrey Nicholson: The right hon. and learned Gentleman is reading too much into the new Clause.

Sir S. Cripps: I am sorry the hon. Gentleman thinks so, but they are the words put down here; this is what the new Clause says. I cannot do more than read the words of the new Clause.

Mr. Nicholson: The right hon. and learned Gentleman cannot deduce from the new Clause a principle which he alleges we are trying to apply to all non-contractual emoluments. If he thinks the new Clause carries the matter too far and lays down a general principle, surely it is possible for the Government to redraft it to cover the cases we have in mind?

Sir S. Cripps: I am pointing out that it is quite impossible to do something for footballers which we say we will not do for anybody else. We cannot pick out the footballer, splendid fellow as he is, and say that we prefer him to the rest of the population. We have to do it for everybody, whether it be footballer, cricketer, parson, waiter, servant or whoever it may be.

Mr. Nicholson: Take, for instance, the waiter. Tips are part of his emoluments. A footballer does not get emoluments every Easter or every time he serves dinner.

Sir S. Cripps: The hon. Gentleman will know that there are a number of ways in which waiters are remunerated, and one of them is out of a fund which is collected from tips or from the amount collected from the 10 per cent. added to the bill. The tips are collected and pooled and distributed quarterly or annually. It is a casual payment which is associated with a person's employment but for which there is no contractual obligation. We cannot distinguish the case of the footballer, because we must cover other people as well.

Mr. Hollis: A benefit is not what he gets annually?

Sir S. Cripps: Surely, he can get it when he likes, after three weeks or a month or any other period of service?

Mr. Hollis: Perhaps the right hon. and learned Gentleman can find some other form of words to achieve the same object?

Sir S. Cripps: I am suggesting that there is an infinity of differing circumstances and that we cannot lay down a definition to exclude certain kinds of income and not exclude others. The only proper way to do it is, as it has always been done, to make the broad principle that people pay Income Tax on


income, and for the courts to decide whether a certain thing is or is not part of a man's income. If they decide in his favour, he does not pay, but if they decide against him, he does. Therefore, we much regret, great as is our sympathy with the footballer, that we cannot possibly accept this Amendment.

Mr. R. A. Butler: There is one argument of the Chancellor's which does not appear to hold water. It seems that he is relying on the doubts existing about the present law, but as one hon. and learned Member from this side has stated there is dubiety on this matter as to how to interpret the law——

Sir S. Cripps: Sir S. Cripps rose——

Mr. Butler: May I finish my observations, when I shall be delighted to receive those of the Chancellor? The dubiety appears to my lay mind to exist in the fact that the cricketer seems to have won his case by taking it to the House of Lords, and it also appears that other cases have followed on that of this signal cricketer, which seems to show that there must be some dubiety.
It seems unfair that the Chancellor should say in Committee on the Finance Bill that he will regulate the law in a way that it is comprehended by the courts. We cannot have two worlds—one world in which there is uncertainty and where a cricketer is allowed his benefit free of tax, and a footballer is not. The alternative would be easy. We should tie up the law so that it would be impossible for the cricketer to take his case to the House of Lords and to get a verdict given in his favour. The Chancellor appears to want to allow an adventurous cricketer, or, indeed, a bold footballer to carry his case through the whole process of law, no doubt at great expense, and to leave the law vague and general. That seems to be the last word in nonchalance, and I think that, having support from all sides of the Committee, we ought to press this matter and ask the Chancellor to reconsider it before the Report stage, to consider what has been said by my hon. Friend the Member for Devizes (Mr. Hollis), and to try to bring forward an Amendment which will make the law and the situation clear as between cricketers, footballers, and all people who desire to draw a benefit.

Mr. Donovan: I hope I shall be forgiven as a representative of a city whose football team performed such prodigies last season if I say a word or two on this matter. Before the Cup Final, the Football Association kindly wrote to me and said they would be according me as such a representative an official invitation, for which I thanked them very much. The official invitation never came along, and I found out afterwards that they had sent it to my colleague the hon. Member for West Leicester (Mr. Janner) on the understanding that the football ground was in his constituency, which is not the case. However, I have lived that down, and have always felt a certain amount of sympathy for the professional footballer in this matter.
I am afraid I disagree with the right hon. Member for Saffron Walden (Mr. R. A. Butler) when he says that there is doubt about the law in this matter. In Seymour's case, on the facts, it was held that the benefit was not a reward for services, but an expression of gratitude to the man as a man though no doubt provoked by his prowess as a cricketer. That has always seemed to me to be a somewhat fine distinction, but there it is. On the other hand, in the case of Mr. Harrison, of Everton, he had it set out in his contract—although it might be subject to discretion—that he was to get a benefit as part of his remuneration. Where those different situations exist—one a lump sum as remuneration for services, and the other a personal testimonial—it is quite easy to see that one should be taxed and the other should not, although the line of demarcation may be very difficult to perceive at times.
9.15 p.m.
I cannot help thinking that, whether it is in black and white in the contract or not, a professional cricketer signing engagement forms for his county knows quite well, and is influenced by the fact, that in all probability, if he behaves himself and scores some runs or takes enough wickets, that eventually there will be a benefit. There is, therefore, I think, little distinction, but, nevertheless, it is not the case that there is dubiety or that the professional cricketer is treated differently in the eye of the law from a professional footballer.
That is the law. When one comes to whatever is the opposite of the law,


whether we call it the merits of the situation or the justice of the case, I think rather different considerations apply. I remember Lord Dunedin saying in the Seymour case, in which the Court of Appeal held that the benefit was taxable, "When I think of this little nest-egg bearing Income Tax as though it were the remuneration of one year, then if it had not been for the fact that the honourable Judges of the Court of Appeal, whose opinions I respect, thought the other way, I should have thought the proposition quite unarguable." I also feel that when a footballer, at the end of five years, gets a lump sum as benefit, then it is a little hard to treat it all as the income of one year.
Here, however, I am afraid I have to differ from the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite). I do not agree in the example he gave, of £2,000, that Surtax would be attracted, because I believe that as a matter of practice the man is allowed to spread his benefit over the past or the ensuing five years, but that is a purely extra-statutory concession and must. I think, indicate the recognition of the Board of Inland Revenue that there is a certain amount of injustice in this matter.
I have been rather impressed by the arguments of my hon. Friend the Member for Huddersfield (Mr. J. P. W. Mallalieu) and those of the hon. Member for Moseley (Sir P. Hannon) when they both said that in reality this is compensation, first, for the loss of efficiency and physical power which a professional footballer must undergo if football is still anything like what it was in my younger days, and I believe it is worse. That wear and tear he must undergo. Secondly, if he is forbidden to have any other trade or employment during his period of service with his club, then he is in an exactly analagous position to that of the director of a company who may say, "I hereby covenant that at the end of my directorship I will not serve without your consent any other company and for that restrictive covenant you shall pay me £5,000." It has been held that that £5,000 is not income but is capital, and in reality some part of the professional footballer's benefit must partake of that character.
Therefore, although I quite agree that if we passed an Amendment in this form we should certainly be in great difficulties in other cases where no hon. Member would want the lump sum to escape—it is extremely difficult, as the Chancellor said, to draw a hard and fast line—I do not think it is impossible to do something for the professional footballer. The law now is that in certain cases lump sums received from superannuation funds shall be taxed as to one quarter. That is purely arbitrary; there is an argument for taxing the whole, but the law says that one quarter shall be deemed to be income and the other three-quarters not. I would welcome a proposal that between now and the Report stage the Chancellor and his advisers may consider whether we could exempt some portion at any rate, specifically, of the footballer's benefit on the grounds that in so far as it was recompense for wear and tear, and in so far as it was a solatium for not being able to accept other employment during the period of service, it did partake of the character of capital and not of income.

Mr. Eccles: I want to support what the hon. and learned Member for East Leicester (Mr. Donovan) said. The Treasury Bench have told us that this Committee could not decide what income is, but what about Clause 20, which decides that all benefits paid under the National Insurance scheme were not in future to be taxable? If we can decide it in the case of Clause 20, we can decide it in the case of footballers. Some modified proposal, such as has been suggested by the hon. and learned Member, will probably meet the views of the House, and I hope the Chancellor of the Exchequer will put it down in his own name on the next stage of the Bill.

Mr. S. N. Evans: I should like to reinforce what has been said by both sides of the Committee. The Chancellor of the Exchequer, as one would expect, has put a very good legalistic case, but he omitted what I might call the flesh and blood aspect of this matter. It is very difficult for the ordinary man in the street to understand why Compton should get £20,000 tax free, while a chap like Stanley Matthews, who gets £900, should have to pay tax on it, because during the course of Compton's career he will have infinitely greater


opportunity than a professional footballer to make his economic position secure. For example, he will go to Australia two or three times, and as a result of those tours will probably collect at least £1,500, whereas the professional footballer does not get those opportunities. Generally speaking, his remuneration will be less than that of the best professional cricketer. Of course, the period in which he is at his best and able to command good money will be very much shorter than that of the professional cricketer.
The Chancellor of the Exchequer should look at this matter from the point of view of elementary justice between these particular classes of persons. A professional footballer gives great pleasure to millions more than a professional cricketer in the course of his career. As a public entertainer, he does an infinitely better job in the quantitative sense at any rate, and it is quite impossible to justify what I regard as this unfair discrimination between these two classes of athletes.

Mr. Nicholson: I can see the grave difficulties which arise in the Chancellor of the Exchequer's mind. He is anxious that there shall be no evasion of tax by people frequently receiving emoluments which are non-contractable. I should have thought that the Government would be able to draw this distinction and say that anything in the nature of a testimonial, which is essentially something which is non-recurring, should not be subject to tax. I hope he will find some solution along those lines. In this House our salaries are subject to tax, but if upon our retirement or perhaps as an inducement to make us retire, our constituents collected £500, that would not be taxable for it would be a testimonial. It would not be emoluments arising out of our employment, and I feel that there should be enshrined in the Income Tax a rule that something in the nature of a testimonial at the conclusion of a person's service should not be subject to tax.

Mr. H. Strauss: I want to associate myself with the argument put forward by the hon. and learned Member for East Leicester (Mr. Donovan). I only wish to call the attention of the Committee to the astonishing argument put forward from the Treasury Bench, which was that, if a thing is income, it must be taxed, and,

if it is not income, it must not, and the courts must decide which it is. That would come very much better from the Chancellor of the Exchequer if Clause 21 were not in the present Bill. The hon. and learned Member for East Leicester persuaded the House of Lords that certain things were not income. Whereupon the Chancellor of the Exchequer promptly comes down to this Committee and inserts in the Finance Bill a provision that what the House of Lords decided, after listening to the skilled advocacy of the hon. and learned Member for East Leicester, was not income, shall in future be income.
That being the case, it is hopeless to pretend that the Chancellor of the Exchequer does not constantly interfere with the decisions of the courts on that sort of question. I see the force, as I am sure did my hon. Friend who moved the Second Reading of this new Clause, of the right hon. and learned Gentleman's criticism of the particular form of words in the new Clause. The benefit referred to in it might be repeated on two occasions or more, but that, I am certain, is not the intention of my hon. Friend. I hope that the Chancellor, while insisting, quite rightly, that the precise words of this proposed new Clause will not do, will listen to the pleas that have been made from all sides of the Committee, and that he will accept the very clear statement of the law made by the hon. and learned Member for East Leicester. I hope that he will not—I will not say "mislead"—but seek to divert the Committee from pursuing what it believes to be just by the argument that only the courts can decide what is income and what is not, when Clause 21 of the present Bill definitely reverses a decision of the courts on this subject.

Mr. Michael Astor: The Committee has slipped into a sense of impotence on this matter and I hope that we can reverse that feeling. The Economic Secretary to the Treasury ignored the argument advanced by my hon. Friend the Member for Devizes (Mr. Hollis). He cannot defend the glaring anomaly which would be corrected by this Clause. I do not see how the Chancellor can avoid accepting the Clause. The Committee must have an opinion in the matter whether the law has been rightly interpreted or not. Are we to understand that the Committee are not


able to decide that matter? The Economic Secretary referred to remuneration; the whole matter hangs on remuneration or gift. I maintain that this is a gift. Let us take the case, which presents a certain parallel, of the gift which Parliament makes to a prominent general at the end of a war. [HON. MEMBERS: "Not with this Government."] Prior to this Government, a general who commanded an army in the field could reasonably expect a fair sum of money granted to him by the people as a gift. Hon. Members may think that there is a big difference between a footballer and a general, because the general wins battles while the footballer only wins football matches. I could argue that they both contribute to the drama of life and that in each case the people subscribe the money, in the case of the general through their representatives but in the case of the footballer directly out of their pockets.
9.30 p.m.
We can equally well argue the cases of the military man with an expectation of a grant given by Parliament and of the footballer with an expectation of a sum of money subscribed by the public. The Economic Secretary was not on firm ground on that point when he said that the case was perfectly plain. I shall not be satisfied unless the Chancellor says that for taxation purposes he will allow this money to be spread over a number of years, not as in the case of authors only two years, which I believe to be inadequate, but over a period of time commensurate with the professional life of the footballer. So far we have not had a single argument from the Treasury Bench in answer to the arguments advanced from this side. It is not too late for us to have a concession on this point.

Mr. Mellish: I wish to join those who have asked the Chancellor of the Exchequer to look at this again. There has been a recent case of this anomaly in my constituency where there is the Millwall Football Club. It may not be so famous from the point of view of its success as some of the others, but it has a very long record, being one of the oldest clubs in the country. It had a man who served it for over 30 years and played for it 30 years ago. He was finally given a job on the ground staff and eventually

became head groundsman. A benefit match was arranged for him with the Scottish football team, Celtic. The balance sheet of the match is interesting. The gross gate was £1,539 5s. 9d. Entertainment Tax of £96 8s. 8d. was paid on that amount, so that the Treasury already had a fair amount of money from it; the referee and the linesmen cost £10 10s. 0d.; the printing was cut to a minimum and the charge was only £1; the police charges were very reasonable, being only £3 4s. 4d.; the turnstile account came to only £22 15s. 0d.; and Celtic's share was £691.
That left a balance of £713 for the benefit of Mr. Moore. Instead of getting £713 he got something like £400. There is an anomaly in the case of this man when we read of Denis Compton getting thousands of pounds from his benefit, which no one begrudges him. While I appreciate the difficulty of my right hon. and learned Friend, I beg him to consider the suggestion of my hon. and learned Friend the Member for East Leicester (Mr. Donovan) in order to see if something can be done. Otherwise, let us be honest about it and make the cricketers pay too, for the present position is not fair.

Mr. Austin: Every conceivable argument which could be canvassed has already been used in support of the Clause and I do not propose to weary the Committee by repeating any of those arguments. It is my duty, however, to remind the Chancellor of the unusual character which the Debate has assumed. A very reasonable case was put forward by two hon. Members opposite and two of my hon. Friends. We saw the Economic Secretary reply in a most inadequate way. Then further arguments were advanced from both sides of the Committee and we saw that the Chancellor had to rise in order to try to answer those arguments. Obviously there is a feeling of disquiet in the minds of all hon. Members when 16 back benchers from both sides of the Committee have already supported the Clause. It seems to me that there may be a case being made out for a third Member on the Front Bench, who I believe is now consulting certain experts, to answer the further arguments advanced.
My right hon. and learned Friend may have satisfied himself on a point of law when he made his explanation, but he


has not satisfied anybody in the Committee, and on that basis alone this matter calls for further consideration on the Report stage. I hope the Chancellor will be broadminded enough to look into the matter again and give satisfaction to hon. Members who, I believe have risen to great heights tonight in examining this simple matter of human relationships in the field of sport. It is a great illustration of the part this House can play in the world outside that it takes such an interest in a matter pertaining to sport as it has done tonight. I accordingly ask the Chancellor, in view of the unusual character of the Debate to give this matter further consideration?

Mr. W. Fletcher: There is here clearly a conflict between equity and law, and when that occurs it can only be resolved by ingenuity. The Chancellor of the Exchequer will have to exercise a considerable amount of ingenuity later in the week in another country, and we all know that he has probably one of the finest and best equipped minds for getting over, round, or under difficulties. The general consensus of opinion in the Committee, as it has been expressed from all sides and from every kind of constituency, is clearly in favour of the Treasury Bench saying, "Though we may be the masters and able to crack the whip, nevertheless, when 16 backbenchers have come forward with the same theme, then it is clearly the duty of the Treasury Bench not to assert the authority they undoubtedly possess but to say, 'The will of the House of Commons as representing the people is in favour of a solution based on equity rather than that the narrowness of the law shall prevail'."
I ask the right hon. and learned Gentleman this question: what happens in the case of war gratuities? It is not an exact parallel—football is one thing and war is another—but surely war gratuities are not subject to tax in this way? On the point of equity, I ask him not to be inflexible in this matter but to see that for once the right, the generous and the wise thing to do is to say that between now and the Report stage, in view of the general consensus of opinion on an entirely non-Party basis, he will consider this again and thereby enhance his reputation and go from here with more power to his elbow to the even greater task he has to tackle later in the week.

Sir Wavell Wakefield: I wish to draw the attention of the Chancellor and the Committee to one point which is analogous, the payment of prize money. There we see a bounty or a benefit to a large number of people which the law provides shall be tax-free. If it is done in that case and in that manner in war, why is it not possible to provide a benefit or a bounty for professional players of games in exactly the same way? I suggest to the Chancellor and the Committee that here is an occasion for combining equity with law as was suggested by the hon. Member for Bury (Mr. W. Fletcher). I hope the Chancellor will look again into this matter.

Sir S. Cripps: Out of courtesy to the Committee, I must say another word about this new Clause. I should like very much to say that I will reconsider it on Report stage and see whether something can be done, but I am afraid it would be a perfectly empty promise. I have examined this question with the greatest desire to do something. This is not the first year it has come up. It is an old Amendment and was up last year and on other former occasions. It has often been examined in an attempt to see whether it was possible to do something.
Quite clearly, everyone would agree that the Clause as set down would not be possible. First it deals only with footballers. Secondly, it deals with
money, commonly known as benefit. …
which really is not a phrase that courts should be asked to interpret. Therefore, the Clause is no good. Nobody has suggested what sort of Clause would be any good. I have been asked to exercise my ingenuity, but nobody else has exercised theirs, to see how it could, in fact, be expressed. The hon. and learned Member for East Leicester (Mr. Donovan) suggested a very general arrangement by which a certain proportion of these payments—whatever "these payments" are—should be discounted for the purpose of Income Tax.
The difficulty, of course, is to define the payments, how the payments of this sort are to be limited, and what are to be the criteria; I have certainly been unable to find any satisfactory criteria at all for this sort of thing, of which there is an infinite gradation from the extreme case when everybody would say, "Of course,


this is a benefit in the sense that it is an uncovenanted benefit; it is not part of his earnings. It is a gift, a testimonial, or what you will"; to the other case where people would say, as the courts have said in other cases, "This is, obviously, simply a delayed part of his remuneration." There is every possible gradation between them, and I do not believe there is any form of words by which we can define where the line should be drawn.
What has been done in the past is to leave it to the courts to draw the line, and they have drawn it, as my hon. and learned Friend said; in one case, quite clearly, they said, "This is a testimonial." In another case they said, equally clearly, "It is a part of remuneration." There was an infinite variety of cases between the facts of which it was impossible to lay down hard and fast lines. Therefore, much as I should like to do something, I am afraid that I cannot promise to do anything more.

Mr. Nicholson: Is there not an analogy in the case of a clergyman who

was not allowed an Easter offering but who, surely, would be allowed, tax-free, a testimonial on giving up his cure. Cannot something be laid down in the nature of a non-recurrent testimonial free from tax? Is not there an analogy here?

Sir S. Cripps: There might be an analogy between that and certain types of so-called benefits to clergy; on the other hand, there might not be, because there is an infinite variety of such payments.

Mr. Ivor Thomas: The Chancellor has admitted that some benefits are of the nature of capital gifts and not income. Is he prepared to give instructions to the Inland Revenue that in such cases they shall not assess the payments for Income Tax?

Sir S. Cripps: Where they are not income, they do not assess them as income.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 131; Noes, 262.

Division No. 180.]
AYES
[9.45 p.m.


Agnew, Cmdr. P. G.
Fraser, Sir I. (Lonsdale)
Maitland, Comdr. J. W.


Assheton, Rt. Hon. R.
Fyfe, Rt. Hon. Sir D. P. M.
Manningham-Buller, R. E.


Astor, Hon. M.
Gage, C.
Marples, A. E.


Baldwin, A. E.
Galbraith, Cmdr. T. D. (Pollok)
Marsden, Capt. A.


Beamish, Maj. T. V. H.
George, Lady M. Lloyd (Anglesey)
Maude, J. C.


Birch, Nigel
Grimston, R. V.
Moore, Lt.-Col. Sir T.


Boles, Lt.-Col. D. C. (Wells)
Hannon, Sir P. (Moseley)
Morrison, Rt. Hon. W. S. (Cirencester)


Boothby, R.
Harden, J. R. E.
Mott-Radclyffe, C. E.


Bower, N.
Harris, F. W. (Croydon, N.)
Neven-Spence, Sir B.


Bromley-Davenport, Lt.-Col. W.
Harvey, Air-Comdre. A. V.
Nicholson, G.


Buchan-Hepburn, P. G. T.
Headlam, Lieut.-Col. Rt. Hon. Sir C.
Noble, Comdr. A. H. P.


Bullock, Capt. M.
Henderson, John (Cathcart)
Nutting, Anthony


Butcher, H. W.
Hinchingbrooke, Viscount
Odey, G. W.


Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)
Hogg, Hon. Q.
Peake, Rt. Hon. O.


Challen, C.
Howard, Hon. A.
Peto, Brig. C. H. M.


Channon, H.
Hurd, A.
Pickthorn, K.


Clarke, Col. R. S.
Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)
Prescott, Stanley


Clifton-Brown, Lt.-Col. G.
Hutchison, Col. J. R. (Glasgow, C.)
Price-White, Lt.-Col. D.


Conant, Maj. R. J. E.
Jeffreys, General Sir G.
Raikes, H. V.


Corbett, Lieut.-Col. U. (Ludlow)
Keeling, E. H.
Rayner, Brig. R.


Crookshank, Capt. Rt. Hon. H. F. C.
Lambert, Hon. G.
Renton, D.


Crosthwaite-Eyre, Col. O. E.
Lancaster, Col. C. G.
Roberts, Emrys (Merioneth)


Crowder, Capt, John E.
Langford-Holt, J.
Roberts, H. (Handsworth)


Cuthbert, W. N.
Law, Rt. Hon. R. K.
Robinson, Roland (Blackpool, S.)


Darling, Sir W. Y.
Legge-Bourke, Maj. E. A. H.
Ropner, Col. L.


Digby, Simon Wingfield
Lindsay, M. (Solihull)
Ross, Sir R. D. (Londonderry)


Dodds-Parker, A. D.
Linstead, H. N.
Sanderson, Sir F.


Dower, Col. A. V. G. (Penrith)
Lipson, D. L.
Spearman, A. C. M.


Drewe, C.
Lloyd, Selwyn (Wirral)
Stanley, Rt. Hon O.


Dugdale, Maj. Sir T. (Richmond)
Low, A. R. W.
Strauss, Henry (English Universities)


Duthie, W. S.
Lucas, Major Sir J.
Sutcliffe, H.


Eccles, D. M.
Lyttelton, Rt. Hon. O.
Taylor, C. S. (Eastbourne)


Eden, Rt. Hon. A.
McCorquodale, Rt. Hon. M. S.
Taylor, Vice-Adm. E. A. (P'dd't'n, S.)


Elliot, Lieut.-Col. Rt. Hon. Walter
McFarlane, C. S.
Teeling, William


Erroll, F. J.
Mackeson, Brig. H. R.
Thomas, Ivor (Keighley)


Fletcher, W. (Bury)
Maclay, Hon. J. S.
Thomas, J. P. L. (Hereford)


Foster, J. G. (Northwich)
Maclean, F. H. R. (Lancaster)
Touche, G. C.


Fox, Sir G.
MacLeod, J.
Turton, R. H.


Fraser, H. C. P. (Stone)
Macpherson, N. (Dumfries)
Vane, W. M. F.




Wakefield, Sir W. W.
White, Sir D. (Fareham)
York, C.


Walker-Smith, D.
White, J. B. (Canterbury)
Young, Sir A. S. L. (Partick)


Ward, Hon. G. R.
Williams, C. (Torquay)



Watt, Sir G. S. Harvie
Williams, Gerald (Tonbridge)
TELLERS FOR THE AYES:


Webbe, Sir H. (Abbey)
Willoughby de Eresby, Lord
Lieut.-Cmdr. Gurney Braithwaite and


Wheatley, Colonel M. J. (Dorset, E.)
Winterton, Rt. Hon. Earl
Mr. Hollis.




NOES


Acland, Sir Richard
Field, Capt. W. J.
Middleton, Mrs. L.


Adams, Richard (Batham)
Fletcher, E. G. M. (Islington, E.)
Mikardo, Ian


Albu, A. H.
Follick, M.
Millington, Wing-Comdr. E. R.


Alexander, Rt. Hon. A. V.
Foot, M. M.
Mitchison, G. R.


Allen, A. C. (Bosworth)
Forman, J. C.
Monslow, W.


Alpass, J. H.
Fraser, T. (Hamilton)
Moody, A. S.


Anderson, A. (Motherwell)
Freeman, J. (Watford)
Morley, R.


Allewell, H. C.
Ganley, Mrs. C. S.
Morris, Lt.-Col. H. (Sheffield, C.)


Awbery, S. S.
Gibbins, J.
Morris, P. (Swansea, W.)


Ayles, W. H.
Gibson, C. W.
Morris, Hopkin (Carmarthen)


Ayrton Gould, Mrs. B.
Gitzean, A.
Morrison, Rt. Hon. H. (Lewisham, E.)


Bacon, Miss A.
Glanville, J. E. (Consett)
Mort, D. L.


Baird, J.
Gooch, E. G.
Moyle, A.


Balfour, A.
Goodrich, H. E.
Murray, J. D.


Barstow, P. G.
Grey, C. F.
Nally, W.


Battley, J. R.
Grierson, E.
Naylor, T. E.


Bechervaise, A. E.
Griffiths, D. (Rother Valley)
Neal, H. (Claycross)


Benson, G.
Griffiths, W. D. (Moss Side)
Nichol, Mrs. M. E. (Bradford, N.)


Berry, H.
Guest, Dr. L. Haden
Nicholls, H. R. (Stratford)


Beswick, F.
Gunter, R. J.
Oldfield, W. H.


Binns, J.
Hale, Leslie
Oliver, G. H.


Blackburn, A. R.
Hall, Rt. Hon. Glenvil
Orbach, M.


Blenkinsop, A.
Hamilton, Lieut.-Col. R.
Paling, Will T. (Dewsbury)


Blyton, W. R.
Hannan, W. (Maryhill)
Palmer, A. M. F.


Bowden, Fig. Offr. H. W.
Hardy, E. A.
Pargiter, G. A.


Braddock, Mrs. E. M. (L'pl. Exch'ge)
Hastings, Dr. Somerville.
Parker, J.


Braddock, T. (Mitcham)
Haworth, J.
Paton, Mrs. F. (Rushcliffe)


Brook, D. (Halifax)
Henderson, Rt. Hn. A. (Kingswinford)
Paton, J. (Norwich)


Brooks, T. J. (Rothwell)
Henderson, Joseph (Ardwick)
Pearson, A.


Broughton, Dr. A. D. D.
Herbison, Miss M.
Peart, T. F.


Brown, George (Belper)
Hewitson, Capt. M.
Popplewell, E.


Brown, T. J. (Ince)
Hobson, C. R.
Porter, E. (Warrington)


Bruce, Maj. D. W. T.
Holman, P.
Porter, G. (Leeds)


Burden, T. W.
Holmes, H. E. (Hemsworth)
Price, M. Philips


Burke, W. A.
Horabin, T. L.
Proctor, W. T.


Butler, H. W. (Hackney, S.)
Hudson, J. H. (Ealing, W.)
Punsey, Comdr. H.


Callaghan, James
Hughes, Hector (Aberdeen, N.)
Randall, H. E.


Carmichael, James
Hughes, H. D. (W'lverh'pton, W.)
Ranger, J.


Castle, Mrs. B. A.
Hynd, H. (Hackney, C.)
Rees-Williams, D. R.


Chamberlain, R. A.
Irvine, A. J. (Liverpool)
Reid, T. (Swindon)


Champion, A. J.
Irving, W. J. (Tottenham, N.)
Rhodes, H.


Chetwynd, G. R.
Jay, D. P. T.
Ridealgh, Mrs. M.


Cocks, F. S.
Jeger, G. (Winchester)
Roberts, Goronwy (Caernarvonshire)


Collick, P.
Jeger, Dr. S. W. (St. Pancras, S. E.)
Robertson, J. J. (Berwick)


Collindridge, F.
Jenkins, R. H.
Rogers, G. H. R.


Collins, V. J.
Jones, Rt. Hon. A. C. (Shipley)
Ross, William (Kilmarnock)


Colman, Miss. G. M.
Jones, D. T. (Hartlepool)
Royle, C.


Comyns, Dr. L.
Jones, Elwyn (PIaistow)
Scott-Elliot, W.


Corbet, Mrs. F. K. (Camb'well, N. W.)
Jones, J. H. (Bolton)
Sharp, Granville


Corlett, Dr. J.
Jones, P. Asterley (Hitchin)
Shawcross, C. N. (Widnes)


Cove, W. G.
Keenan, W.
Shurmer, P.


Crawley, A.
Key, Rt. Hon. C. W.
Silverman, J. (Erdington)


Cripps, Rt. Hon. Sir S.
King, E. M.
Silverman, S. S. (Nelson)


Daggar, G.
Kinghorn, Sqn.-Ldr. E.
Simmons, C. J.


Dalton, Rt. Hon. H.
Kinley, J.
Skinnard, F. W.


Davies, Edward (Burslem)
Kirby, B. V.
Smith, C. (Colchester)


Davies, Ernest (Enfield)
Lee, F. (Hulme)
Smith, S. H. (Hull, S. W.)


Davies, Haydn (St. Pancras, S. W.)
Leonard, W.
Sorensen, R. W.


Davies, R. J. (Westhoughton)
Leslie, J. R.
Soskice, Rt. Hon. Sir Frank


Davies, S. O. (Merthyr)
Levy, B. W.
Sparks, J. A.


Deer, G.
Lindgren, G. S.
Stewart, Michael (Fulham, E.)


Delargy, H. J.
Lipton, Lt.-Col. M.
Stokes, R. R.


Diamond, J.
Logan, D. G.
Stross, Dr. B.


Dobbie, W.
Longden, F.
Stubbs, A. E.


Dodds, N. N.
Lyne, A. W.
Summerskill, Rt. Hon. Edith


Driberg, T. E. N.
McAdam, W.
Sylvester, G. O.


Dye, S.
McAllister, G.
Symonds, A. L.


Ede, Rt. Hon. J. C.
McEntee, V. La. T.
Taylor, R. J. (Morpeth)


Edwards, W. J. (Whitechapel)
McGhee, H. G.
Taylor, Dr. S. (Barnet)


Evans, Albert (Islington, W.)
Mack, J. D.
Thomas, D. E. (Aberdare)


Evans, E. (Lowestoft)
McKay, J. (Wallsend)
Thomas, George (Cardiff)


Evans, John (Ogmore)
Mackay, R. W. G. (Hull, N. W.)
Thomas, I. O. (Wrekin)


Ewart, R.
McLeavy, F.
Thorneycroft, Harry (Clayton)


Fairhurst, F.
MacPherson, Malcolm (Stirling)
Thurtle, Ernest


Farthing, W. J.
Mainwaring, W. H.
Titterington, M. F.


Fernyhough, E.
Mann, Mrs. J.
Tolley, L.







Tomlinson, Rt. Hon. G.
Wells, W. T. (Walsall)
Williams, W. R. (Heston)


Turner-Samuels, M.
West, D. G.
Willis, E.


Ungoed-Thomas, L.
Wheatley, Rt. Hon. John (Edin'gh, E.)
Wills, Mrs. E. A.


Viant, S. P.
White, H. (Derbyshire, N. E.)
Wilmot, Rt. Hon. J.


Wadsworth, G.
Whiteley, Rt. Hon. W.
Woodburn, Rt. Hon. A.


Walker, G. H.
Willey, F. T. (Sunderland)
Wyatt, W.


Wallace, G. D. (Chislehurst)
Willey, O. G. (Cleveland)
Yates, V. F.


Wallace, H. W. (Walthamstow, E.)
Williams, D. J. (Neath)
Young, Sir R. (Newton)


Wartey, W. N.
Williams, J. L. (Kelvingrove)
Younger, Hon. Kenneth


Watkins, T. E.
Williams, Ronald (Wigan)



Weitzman, D.
Williams, Rt. Hon. T. (Don Valley)
TELLERS FOR THE NOES:


Wells, P. L. (Faversham)
Williams, W. T. (Hammersmith, S.)
Mr. Snow and Mr. Wilkins.

New Clause.—(RATE OF EXCISE DUTY ON PRIVATE MOTOR CARS.)

(1) For the purpose of calculating the duty of excise chargeable under section thirteen of the Finance Act, 1920, in respect of a mechanically propelled vehicle of a description specified in paragraph 6 of the Second Schedule to that Act, being a vehicle registered under the Roads Act, 1920, the following paragraph shall be substituted for the said paragraph 6, that is to say—
6. Any vehicles other than those charged with duty under the foregoing provisions of this Schedule—

(a) Electrically propelled vehicles—£7 10s.
(b) Other vehicles—
Not exceeding 7 horse-power—£7 10s.
Exceeding 7 horse-power—£10.

(2) This section shall come into operation on the first day of January, nineteen hundred and fifty.

(3) Section nine of the Finance Act, 1947, is hereby repealed as from the thirty-first day of December, nineteen hundred and forty-nine.—[Mr. Renton.]

Brought up, and read the First time.

Mr. David Renton: I beg to move, "That the Clause be read a Second time."
The effect of this new Clause, which stands in the name of the hon. Member for Bedford (Mr. Skeffington-Lodge) and other hon. Members on both sides of the Committee, including myself, would be to apply the rates of taxation of motor cars which were introduced in the Finance Act, 1947, to all motor cars instead of merely to those which were first registered since 1st January, 1947. The purpose of the Clause, therefore, is to streamline provisions of the law which in the light of experience in the past two years are shown to be greatly in need of that treatment.
It would be fair to say that when the flat rates were introduced in 1947 they were greatly welcomed by the manufacturers. They enabled the British manufacturers to design cars suitable for the overseas market without running the risk of being financially penalised in the home

market. But as soon as the flat rate tax for new cars was introduced in 1947 it was obvious that it would give rise to anomaly and even injustice with regard to the owners of the older cars. It places the owners of pre-1947 cars, who will continue to pay at the rate of 25s. per horsepower, in a much worse position than the fortunate owners of new cars.
If I may give an example I would point out that the owner of a new 20-horsepower car pays a flat rate of £10, whereas the owner of a pitiful old car of 10-horsepower pays £12 10s.; that is £12 10s. for a 10-horsepower old car as compared with £10 for perhaps a 30-horsepower new car. That does not make sense; indeed it is something which I am sure hon. Members on both sides of the Committee will consider most undesirable. It makes one law for the rich and another law for the poor.
I am sure it is agreed that taxes should be fair and equitable, and that they should not unjustifiably penalise some taxpayers in comparison with others. But here with regard to the present Motor Tax we find discrimination against the worthy and inoffensive section of small motorists who simply keep a small old car to take the family about in, when they can get petrol to do so. It is maintained, especially by hon. Members on the opposite side of the Committee, that taxes should be placed on backs which are most capable of bearing them. In this case we find that motorists already bearing a heavy financial handicap by trying to keep old cars on the road are submitted to the further financial handicap of paying a higher tax in order to do so; and the owners of bright new cars, whose costs of repair are obviously very much lower pay the £10 flat rate only.
There is a factor which the Committee should especially bear in mind. It is that the tendency to license old cars for only part of a year, or to lay them up altogether, must result in a certain amount of confusion and waste in administration,


and also result in wastage of valuable motorcar power. I suggest that administration would be greatly simplified and costs reduced if we made a clean sweep and introduced the flat rate as proposed in this new Clause. Therefore it seems on the grounds of justice, reason and convenience that there is a strong case for the proposed new Clause.
The only argument that it is possible to conceive against it is the ground of cost to the Revenue. Before I go any further perhaps I should disclose to the Committee that although I have no financial interest in this Clause I happen to be a member of the Executive Committee of the Automobile Association, at whose instigation—as hon. Members may very well guess—this Clause is very largely produced. What about the cost of our proposal? In the first place, it is suggested that the flat rate should not be introduced before 1st January, 1950, and it would not cost anything at all until that date. Although one can only speculate with regard to the figures, I suggest that it might not cost very much then. It depends largely upon how many new cars are put on the road to replace the old cars.
10.0 p.m.
In July, 1947, the Chancellor of the Duchy of Lancaster, who was then Chancellor of the Exchequer, considered an Amendment on similar lines to this new Clause. He could not accept it and he gave as his reason the loss of revenue to the Treasury, but said that the cost of introducing a flat rate would become progressively less and less. I understand that in 1947—the time at which he was speaking—a Member of the Government in answer to a Question said that the estimated cost would be £5,750,000 a year. That was two years ago. Since then 250,000 new cars have been placed on the road and, of course, a good many old ones have gone reluctantly on their last journey to the scrap heap, never to return.
By 1950, presuming that no cataclysm prevents the issue of new cars at the rate at which they have been issued during the last two years, we can fairly expect that this peculiar application of the law of diminishing returns will work to felicitous advantage and will not make the cost of this proposal very

great. Therefore, I ask for an estimate of what this proposal would cost the Treasury. I suggest, in any event, that it cannot be a very large sum. If it were £2 or £3 million, I suggest that in the present state of our finances it would not be too high a price to pay for securing justice for the owners of small cars, for removing an anomaly—just the kind of anomaly that we ought always to try to avoid when imposing taxes—for simplifying administration, and for streamlining a provision which obviously is now out of date.

Lieut.-Colonel Lipton: In supporting the Motion, I should like to put the consideration to the Government that there is no doubt that a system of taxation which discriminates between cars of different vintage is an anomaly. This was recognised as an anomaly when it was introduced in 1947. The then Chancellor made it clear that a time would come in the not too distant future when this inequality would have to be ironed out. Perhaps I have a personal interest in this matter as I am the owner of a car of 1934 vintage on which, if this Clause is adopted, I shall save something in the neighbourhood of 1s. a week.

Mr. Stokes: Interest or capital?

Lieut.-Colonel Lipton: I should prefer to describe it as a running charge—if the car is still running when this new Clause is adopted. It seems rather odd that, as a result of these fiscal arrangements, people running old cars who are thereby improving the possibility of the export of new cars, should be penalised because they are patriotic or foolish enough to continue running them. I hope that for those reasons it will be possible—if as I understand it the Government realise that here is an anomaly which will have to be ironed out—for this concession to be made at the earliest possible moment.

Colonel Dower: I consider this is a very sensible proposal. I also have an interest in the matter; my car is a 1913 vintage. [An HON. MEMBER: "An old crock?"] Well, why should not the old crocks be put on the road? It is this taxation which prevents it being done. On all grounds of equity and common


sense, this discrimination against old vehicles which have given good service should be ironed out. I am told that my car would fetch £50 if I sold it. The tax, if I put it on the road, is £50, and therefore it remains on four blocks. It really is an absurd position, and there is really no substance in the arguments put forward by those who oppose this concession.
There is another point. We are told that at a time like this we must be prepared to make both ends meet, but it is this particular tax which prevents us doing so, because it encourages the spending of money in a way which would not be necessary were it not for this Government's penal taxation. I do not know how much the Government would lose by the concession, but I hope that the right hon. and learned Gentleman will prove to us that he does listen sometimes to arguments put forward from both sides of the Committee, and that he will show some sensitivity to the feeling of the Committee. I am sure that if hon. Members were given a free vote on this question, they would not say that old cars should be taxed considerably more than new ones. I appeal to the Chancellor to listen to the arguments put forward.

Mr. J. Lewis: I think it is only fair to the Government to recall the circumstances in which the flat rate tax was imposed. Hon. Members will remember that we pleaded with the Chancellor of that day to introduce the flat rate tax because we were very anxious that the British motor car manufacturer should not be prevented by any arbitrary fiscal policy from building cars which could find a ready market abroad. The Chancellor met us in that respect, because he made it possible for all new cars which were delivered after 1st January, 1947, to be subject to this flat rate of tax. But the circumstances which we have in mind at the time are not necessarily those which obtain today, and I ask my right hon. and learned Friend to take into account the gross discrepancy which exists today between the position of people owning old cars and those fortunate enough to obtain new ones.
The shortage of petrol makes it possible for only a comparatively small mileage to be covered throughout the

year, and I hope the Chancellor will consider the economic difficulties of motorists who have to pay 25s. per horsepower and can only use their cars for a limited mileage. There is the further point that the older the car, the more petrol and oil it uses and it costs more in repairs and to maintain and run than does a new one. The export drive makes it relatively difficult to obtain new cars today in a short period, and therefore people are bound to keep their old vehicles whether they like it or not. In those circumstances, it seems to me that there is an additional penalty imposed upon them, because they have to pay so much more in respect of Excise Duty.
My final point is this. People can no longer regard a motorcar as a luxury; indeed, it must be regarded as essential today to two-thirds of the people who own one, and that is proved by the fact that two-thirds receive a supplementary petrol allowance. I hope that the Chancellor will take the present circumstances into consideration. Although we quite agree that they are not the circumstances which obtained at the time when we pleaded with the Government to impose the flat rate of tax and that it was not the same argument today as that which we put forward at the time, we must ask him to agree that the position today calls for some consideration of the position of those motorists who are bound to run old cars when they would like to buy new ones. I hope that my right hon. and learned Friend will take those facts into account.

Mr. Gerald Williams: I wish to add a few words on very broad principles in support of this new Clause. It has always been the function and desire of Chancellors of the Exchequer to see that taxation falls quite fairly on all classes, so that if one drink is taxed another is taxed in the same way. Again, if matches are taxed, so also are cigarette lighters, although that principle appears to have been thrown to the wind by the present Chancellor only a few minutes ago in that he insists on taxing footballers and not cricketers. However, I wish to recall the way that former Chancellors treated the principle of taxing all classes of commodities in exactly the same way, and this is what should be done now.
I agree that it was entirely right for the Chancellor of the day to adopt the


method of the £10 tax on new cars. As we all know, it was done to help the export trade, but I think the right hon. Gentleman should have been far-sighted enough to realise that he was going to bring a great deal of trouble on himself before very long. I expect he did, and now that we have had a couple of years' experience of the matter, the present Chancellor can very easily make this concession. The loss to the Revenue is an ever diminishing one as the months go by and as there are fewer old cars on the road to pay this high tax. He may as well be generous now while it is going to do some of us a little good. It is not a concession to joyriders. As the hon. Gentleman the junior Member for Bolton (Mr. J. Lewis) said, 66 per cent. of the people are using their cars for industrial and business purposes. This unfairness should be removed as quickly as possible. I believe that if it were, it would be of some help to the Chancellor himself in that he would find it much easier to administer a flat rate of tax than one of 25s. per horsepower. I also believe that his officials would get a great deal less bother because instead of taxing their cars by the quarter or the half-year, people would be able to pay the tax for the whole year. He would thus benefit himself as well as the motorists.

Mr. Glenvil Hall: I do not know whether it would be for the convenience of the Committee if I intervened now to express the point of view of my right hon. and learned Friend on this Clause. I venture to think that it might possibly shorten the proceedings if I did, particularly as we have a fair way to go before we rise tonight if we are to deal with as many of the outstanding Clauses as we think essential at this sitting. My hon. Friend the junior Member for Bolton (Mr. J. Lewis) reminded us how this anomaly arose, and an anomaly it undoubtedly is. When it was instituted, under a great deal of pressure from all sides of this Chamber and from interests outside, my right hon. Friend the then Chancellor of the Exchequer realised that he was doing something which, if it continued for a great length of time, would appear to many people to be unfair. He then indicated, as has been quoted by my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton), that he hoped the matter might be equalised

at the earliest possible moment. The difficulty is that it is impossible for me tonight to indicate to the Committee that that time has arrived.
10.15 p.m.
This new flat rate was introduced as from 1st January, 1948, on, cars which were registered during 1947 and afterwards. The reason why this rate was introduced was then thought to be overriding, in spite of the anomaly which hon. Members have pointed out tonight. What we wanted to do was to encourage standardisation, to divorce design from taxation, to stimulate the export trade in cars in order to reduce costs, for the reasons I have mentioned as well as others, and also—and I would underline this if I might—to avoid the artificial concentration on small horsepower engines.
Those who study the proposed Clause will see that a special low rate is mentioned for small-engined cars of seven horsepower. Therefore, if my right hon. and learned Friend were able, on the other reasons, to accept this Clause, it would, in our view, be a retrograde step if we accepted it with the inclusion of this scale for cars not exceeding seven horsepower.

Mr. Renton: I think if the right hon. Gentleman compares the Finance Act of 1947 with these provisions he will find that the two rates correspond and that there is no introduction of a new scale.

Mr. Glenvil Hall: We do not want to perpetuate this if we can help it. [HON. MEMBERS: "You are doing so."] Oh, no. For all cars registered from the beginning of 1947 onwards the flat rate is £10. Before I sit down I want to make one further point—and I do not want to take up time which other hon. Members might easily employ. We cannot at the moment make this change so that the new rate applied to older cars. If all vehicles were placed on the £10 tax the cost would be something like £5½ million in the year 1950. Unfortunately, my right hon. and learned Friend cannot afford to forgo that revenue. For that reason alone I must ask the Committee to reject this Amendment.

Mr. Renton: Before the right hon. Gentleman sits down, may I remind him that two years ago the cost was estimated at £5¾ million for a full year. Bearing in mind the considerable number of new


cars coming on to the road and replacing old cars, how is it that the estimate can still be as high as £5½ million?

Mr. Glenvil Hall: Because the old cars are still running. As a matter of fact, I think the figure to which the hon. Gentleman referred was given in March, 1949, and not two years ago. In response to a question put to him, I think, by the hon. Member for Wood Green (Mr. Baxter), my right hon. and learned Friend indicated that the estimated cost was about £6 million. Because vehicles have gone off the road, and taking a closer estimate because we are nearer the time, we have reduced that estimate, and it would now cost £5½ million. I can assure the hon. Member that, although it may sound fantastic to him, those best able to judge—the experts—estimate that this would be the figure.

Air-Commodore Harvey: The Financial Secretary has put forward a most extraordinary argument. He spoke of getting on with further Business, but if he is going to handle other Business on lines similar to those on which he has handled this Amendment then it is a very poor outlook. A person who can afford to buy a new car and who has been fortunate enough to get delivery gets away with a low tax, whereas a person who runs an old car, who is confronted with all the difficulties and expense of additional maintenance and repairs has to pay a higher tax. In the last 12 months the insurance on motor cars has increased by something like 50 to 60 per cent. I understand that to some extent that is due to the fact that motor cars are growing older and are becoming involved in accidents because of their condition. The majority of these old cars are small Morris Eights which in the morning are shared by workers going to their work. If there were one class of workers to protect in this instance I would have thought that it was those using these cars to get to their work. Cars used by employers are run by the companies quite legitimately as an expense to the companies, but such is not the case with the small car used by the workers.
The argument used by the Treasury seems to me to be most extraordinary. When this proposal was introduced the Chancellor admitted that the matter would have to be reviewed in the light of

experience. We have had two years to see it working, and I should have thought that this was an appropriate time to review and amend it. There are financial considerations I know, but when we make laws in this Committee they should be fair to all classes. I hope hon. Members will go into the Division Lobby with me to make a strong protest against the unfairness with which this matter is dealt.

Mr. Stanley: I agree with a great deal that my hon. and gallant Friend the Member for Macclesfield (Air-Commodore Harvey) has said, but I must confess that I do not want to carry too far the argument in regard to one firm, because it is a fact that the anomaly which was created was pressed upon the Chancellor of the Exchequer at the time from all sides of the Committee. We asked him to create this anomaly, because for the new cars, we did not want this new simplified, and to all of us, more progressive method. Therefore, I am not going to blame the Chancellor of the Exchequer because this anomaly exists. The Government, as well as we on this side, must see that if that anomaly came to be introduced, the time must come when it can no longer be sustained. That, indeed, has been the view put forward by successive Chancellors of the Exchequer, both at the time that the new rate was introduced and subsequently when Amendments such as this were moved.
What we are now considering is whether this year is the appropriate date to remove an anomaly, with the creation of which we all agree, but which we, at some time or other, are going to demand should end. I must confess that I was extremely disappointed to hear from the right hon. Gentleman that the cost of this Amendment will be as much as £5½ million. I had hoped, in view of earlier statements and the fact that already, through great age, cars on the road were being withdrawn at a fairly rapid rate, that this cost was shrinking by some appreciable sum every year, and that the amount given today would have been of a much more moderate size.
If it had been of a more moderate size I feel we ought to have pressed for the change to be made, but if we must accept—and, of course, we do—the answer given on behalf of the Chancellor the Exchequer, based on the estimates


of his experts, that this would cost £5½ million, I must frankly ask myself whether, if we have £5½ million to spare for the reduction of taxation this year, this case is such a deserving one that I must place it first? I must say in fairness I do not think it is. It is a deserving case, and because of that I hope before long that it will be met. However, if the Financial Secretary to the Treasury were suddenly to go off his head—and I do not suggest for one moment that such a contingency is likely to happen—and offer me my choice of any object I liked, on which I could secure a reduction of £5½ million per annum, I should not feel able to give this priority.
Therefore, I feel that we have expressed the view that sooner or later this anomaly must be met, and that it is only the heavy cost which is required to do it which prevents the Committee from doing it today. As far as I am concerned, I could not press this Amendment I to the Lobby, but certainly in another year I hope it will be possible to take a different view.

Mr. Erroll: In view of the figures of cost which have been given it is difficult for us to speak with great strength on the subject, but it is important for the Treasury to appreciate the strong sense of injustice aroused by the anomaly. The Financial Secretary said that conditions had not yet come about for the anomaly to be rectified but they must arise some day and we hope that the day may be soon. Possibly the concession might start now and the existing rate of 25s. per horespower be reduced, say, to £1 per horsepower. That would give an earnest of good faith and would not cost very much. It would be a pledge for the future.
I hope the Chancellor and his advisers, when working out the £5½ million, took into account the number of cars at present not being licensed but which would be brought out if there is a concession and would contribute to a reduction of the £5½ million. A further aspect of the anomaly is that while the tax might not have appeared unreasonable in pre-war days, it appears so now, with the severe restrictions on the consumption of petrol making it impossible to spread the cost of the licence over so large a number of miles per annum as before the war. We hope that each year some part of the

anomaly will be removed. If a beginning cannot be made this year we hope that it might be possible next year.

Mr. J. Foster: I have a 1939 30-horsepower car which pays only £10 a year tax. It is very unfair that people with 10 or 15-horsepower cars, also dated 1939, should pay £18 or £20. [HON. MEMBERS "How does the hon. Member do it?"] I am speaking in confidence, and I hope it will not go any further. Actually, I sent £45 to the L.C.C. and they sent me back £35, and I have paid £10 ever since. The actual reason was that the car was not registered until this year. I did not appreciate that an old car not registered until 1947 did not have to pay more, so I think the L.C.C. must have been quite right. The anomaly is unfair. Surely, the right hon. Gentleman could introduce a gradation downwards, taking a half crown off this year and 5s. off next year. If the Government would give a little bit, it would show people that they mean well. People would be encouraged. We need encouragement from the right hon. Gentleman. We do not get it. I ask him to take a little more off the horsepower tax.

10.30 p.m.

Mr. Birch: The Financial Secretary, when he made his remarkable reply, said that it might seem fantastic to some hon. Members on this side that the amount had actually increased over the amount announced from the Front Bench at previous dates. The only conclusion one can come to is that these old cars have been breeding, which, on the face of it, is rather improbable. I cannot help feeling that the right hon. Gentleman may have over-estimated the cost. As usual when he is defending an unworkable case, the right hon. Gentleman gave the case away by saying it was an anomaly and promised from the Treasury Bench that it would be brought to an end, and then went on to say that it would not be brought to an end however anomalous it might be.
I stress the point made by the hon. Member for Huntingdon (Mr. Renton), which has not received much comment, that those who run these old cars are mulcted for repairs to an enormous extent. I declare my interest in this matter. I have a comparatively young car, 1935, and when one has a car of that age, one finds that almost every month something goes wrong with it.


Nowadays repairs cost about three times as much as they did before the war. The real crux of the matter is that it is Government policy that we should find it impossible, or extremely difficult, to get a new car. It is a torture of Tantalus to see in the shop windows new cars whose running costs would be enormously lower in repairs and in tax but which, owing to Government policy, one cannot buy. If you have an old car, as I have, you are bound to run it because you cannot get a new one.
The right hon. Gentleman ended his oration by saying that we would be taking a retrograde step by rectifying this anomaly. I cannot see why. I should have thought it a sensible step, and a just and right one. I should like to make a last comment on the right hon. Gentleman's speech. He said there was a frightful hurry to get through the list of new Clauses. I see no hurry. Taxation under the Finance Bill affects every single person in the country and where questions of injustice arise, they should be properly discussed and put right. I think my hon. Friend did right to raise this matter.

Mr. C. Williams: There are one or two things I should like to know before leaving the Clause. What is the estimated life of these cars on the road. Apparently there is considerable doubt in the Treasury's mind as to precisely the loss to be incurred now as compared with what it might have been two years ago. The figure is given as one in the neighbourhood of £5½ million or £6 million. Working on that sort of line, it looks very much as if the estimated life of these cars would be something like twenty-odd years, which seems to me to be rather long. The other line of figures which the right hon. Gentleman gave would make it doubly long, because they bring the life of these old cars to over forty years. The Treasury have based these estimates on a rather absurd set of figures.
Before the Clause is negatived or withdrawn, I should like to know precisely how long it will be before the concession is likely to be made on the rather optimistic line held out by the previous Chancellor. I quite realise that it means a great deal of money, and I would far rather that it should be taken off direct

taxation, such as Income Tax; but there is a large number of people who have a definite sense of grievance on this matter. At present they should be encouraged to go on using their old cars rather than to go into the market for new ones. We are told very clearly by the Chancellor of the Exchequer that prices are staying too high. While I was fully in accord with the object of the original flat rate of £10, it might seem to be advisable now to do something to encourage the use of these old cars by lowering the duty.
I wonder whether it would not be possible for the Financial Secretary to say that although the Government cannot give the whole of the provisions in the new Clause this year, they will cut the duty down so that no old car will pay more than double the duty and that next year they will cut it down to, say, £15 as a maximum. If some concession of that sort could be made—and it would not come into effect until next January—it would not cost £5½ millions this year. A large part of it would spread over the coming year, and many of us on this side of the Committee hope that by this time next year there will have been an election and we shall have a sensible Government and a Socialist Government will not have to face this position. That would go some way to meeting our wishes on this point.
This appeal has been made in the main for people who are not well off. The new cars are mostly owned by people who are well off and have been very lucky in getting them in many cases. It is always rather a mystery how and why they get them. In any case, most of them are on the other side of the Committee. Many of the new cars go to Government Departments. I make an appeal to the Financial Secretary, especially as the Chancellor of the Exchequer is not here, because I know that if he had been here I would not have had any chance in appealing for the poor man. I see that the Patronage Secretary is here and is obviously feeling the heat very badly, and I therefore ask him to join in my appeal for this concession to the poor people of this country. I hope the Financial Secretary will give us some hope for the future and not tell us to go to our constituencies and say that here is another illustration of the Government's care for the poor, for those


who cannot afford a new car; these are the people the Government always tax.

Mr. Renton: In view of the high estimate of the cost which the Financial Secretary has given us, I think it would be right to ask leave of the Committee to withdraw the Clause. But in doing so may I ask him to consider the useful and constructive suggestions made to him for easing the burden without completely accepting our proposal. May I also, with due respect to the officials concerned, ask that this very surprising estimate of £5½ million as the cost of conceding the proposal be carefully scrutinised and the basis on which it has been reached carefully examined. I therefore beg to ask leave to withdraw the Clause.

Hon. Members: No.

Question put, and negatived.

New Clause.—(AMENDMENT OF S. 19 OF FINANCE ACT, 1925.)

Subsection (1) of section nineteen of the Finance Act, 1925 (which provides for claims for exemption in respect of income of charities and for repayment of tax in respect of interest paid to banks, and right of appeal in connection therewith) shall be amended by inserting at the end thereof the words—
Provided that nothing in this subsection shall prevent the said Commissioners from considering a claim signed by a person holding the power of attorney of an individual who is resident outwith the United Kingdom."—[Lieut.-Commander Hutchison.]

Brought up, and read the First time.

Lieut.-Commander Clark Hutchison: I beg to move, "That the Clause be read a Second time."
This is a rather technical matter, and I fear that the wording of the new Clause may appear rather obscure to hon. Members. I am afraid that that is due to considerations outwith our control. Actually, the point is a very simple one, but unfortunately it makes reference to three different Statutes, and has necessitated a rather awkward piece of drafting. Its purpose is to permit a person such as a law agent who holds the power of attorney of a person resident outwith the United Kingdom to sign a claim for repayment of Income Tax on behalf of that person. We have been advised by a law firm of standing in Edinburgh that this practice was, in fact, followed for a great many years, although that assertion is disputed by the Board of Inland Revenue, who have stated that

it was only followed during the abnormal conditions of the war years, when communications with places overseas were sometimes difficult.
But, apart from this particular point, on which there is disagreement, I would stress that, under Scots law, a person holding a power of attorney on behalf of some other individual has today, and has had for many centuries past, the fullest possible authority to act on behalf of that person or client. The lawyers in Scotland take exception to this attempt on the part of the Board of Inland Revenue to set aside the law of Scotland by administrative action.
I cannot claim to speak with personal authority on legal matters, because, as the Committee knows, I am not a lawyer; but, as a layman, the position taken up by the Inland Revenue authorities in this matter appears to me to be absurd. Under Scots law, a person holding a power of attorney is charged with authority to sign papers and documents of the utmost importance and yet, under this very recent ruling by the Board of Inland Revenue, this simple act of signing a claim for repayment of Income Tax on behalf of a British subject occupied in some Service abroad or who, for reasons of health, is living overseas in some remote or inaccessible place, is now forbidden. That is the substance of our case.
I turn now to the actual wording of the Amendment which, as I have said, is somewhat complicated. Claims to relief in respect of Income Tax in the case of a person living abroad are allowed under the terms of the proviso to subsection (i) of Section 24 of the Finance Act, 1920, and under Section 20 of the Finance Act, 1926. These claims require to be made out in accordance with subsection (i) of Section 19 of the Finance Act, 1925, and it is the terms of this section which we are now seeking to alter by the new Clause on the Order Paper. Perhaps it would be advisable for me to read subsection (i) of Section 19. It runs:
(i) Any claim for:—

(a) exemption from income tax under the provisions of section thirty-seven of the Finance Act, 1918, or section thirty of the Finance Act. 1921 (which sections provide respectively for exemption in the case of certain income of charities and for exemption in respect of lands owned and occupied by charities and of profits of trades carried on by beneficiaries of charities): or


(b) repayment of income tax under section thirty-six of the Income Tax Act, 1918 (which provides for the repayment in certain cases of income tax in respect of interest paid to banks, discount houses, etc., out of taxed profits):

shall be made to the Commissioners of Inland Revenue in such form as they may prescribe, and the said Commissioners shall on proof of the facts to their satisfaction allow the claim accordingly.
10.45 p.m.
The words to which I must call the attention of the Committee are, of course, "in such form as they may prescribe," because they leave everything in the hands of the Commissioners of Inland Revenue. I am the last person to be opposed to a reasonable degree of flexibility in administration. It is a point which we on this side of the Committee very often have to make, but when a matter of importance arises where the administrative action of the Commissioners of Inland Revenue runs counter to the law of the land—in this case the law of Scotland—we feel that it is high time that the position should be clarified and put in regular form. I submit that the only constitutional way in which this can be done is to amend the existing Statute in such a manner as to ensure that the Commissioners of Inland Revenue will be entitled to permit claims to be signed by persons who hold a power of attorney.
I feel that the new Clause will achieve this result. It does not in any way compel the Commissioners of Inland Revenue to accept any claim about which they may have any legitimate doubt. All it means is that they should not refuse, and should not decline to consider, claims which are signed by a person who holds the power of attorney for someone who is outside this island. I feel this is a reasonable proposal which will be helpful to a considerable number of people and will be, I think, also of assistance to the Board of Inland Revenue itself as it will same them a good deal of correspondence, as in the particular case I have in mind and no doubt in many other cases. Furthermore, I would point out to the Treasury Bench that whereas in other matters which we have been discussing today there has been a financial burden upon the Exchequer, there is no additional burden under this Clause which we put forward. Rather it is the

reverse, because a great deal of correspondence and unnecessary labour on the part of the Government Departments and law firms would be cut out. For these reasons I hope that the Government will see fit to accept this very necessary Clause.

Sir William Darling: This is an Edinburgh occasion. It is very rare that Members for Edinburgh raise their voices in this House. I am happy to support my hon. and gallant Friend the Member for West Edinburgh (Lieutenant-Commander Hutchison) on this important matter. He has put the case with great clarity. As I understand it, and as I am advised, it really amounts to this, that the Commissioners of Inland Revenue have the folly—if I may be so bold as to say so—to say that in the case of a resident outside the United Kingdom, they will not take the signature of his or her lawful attorney in this country but instead he or she shall sign the documents himself or herself.
Now, I put it to the Solicitor-General that the Chancellor of the Exchequer is anxious to encourage invisible exports and that this device as at present practised by the Commissioners discourages the employment of attorneys, Writers to the Signet, solicitors, and lawyers in this part of the country. There are at present living in Boston, Bulawayo and in Canada those who want to make certain business transactions in this country and who appoint lawyers in Edinburgh for this purpose. The Commissioners of Inland Revenue have the effrontery to say they have not to do so, although if they do they will be collecting fees from overseas and assisting us in our revenue balances. The Government are preventing this very valuable service from being rendered. What advantage the Commissioners enjoy, I fail to see. The case I have in view is that of the person who has a considerable investment in the United Kingdom and lives in Canada. He is anxious to continue his investment, but the intention of the Commissioners is to make it extremely difficult for him to do so. They insist that he shall not have an attorney to handle his business in this country, but that he shall conduct his correspondence across the seas.
I do not see any reason why this measure should not be permitted. We


have persons in the Dominions and elsewhere who want to employ learned gentlemen in this country to conduct their business, and they should be allowed to do so. The Inland Revenue should not insist on their having to conduct their business across the seas. I was surprised to learn that during the war the Commissioners allowed this perfectly reasonable transaction; but once the war was over they fell back on Section 19 of the Finance Act, 1925, whereby no claim is permitted unless in such form as may be prescribed. I suggest that if persons are anxious to do business with British citizens, the Government should facilitate and not handicap such transactions.

The Solicitor-General: As I understand it, this proposal is designed to relate to claims by British subjects overseas in respect of earned income relief and relief in respect of payments of Income Tax at the lower rate. If the hon. and gallant Member for West Edinburgh (Lieut.-Commander Hutchison) will permit me, I will supplement his reference to Section 19 of the Finance Act, 1925, to make his argument complete. The right is not given by that Section but by Section 24 (1) of the Finance Act, 1920, and Section 20 of the Finance Act, 1926, prescribes that claims made under the Finance Act, 1920, have to be put forward in accordance with Section 19 of the Finance Act, 1925.
Members opposite rested their case on the view that there was in some way an interference with the proper operation of the law of Scotland. I can assure them that that is not the case. The law is laid down in the section the hon. and gallant Member read out, which is the law of England and Scotland. That law prescribes that such claims are to be made to the Commissioners in such form as they may prescribe. In other words, the law enables the Commissioners to prescribe the forms upon which such relief is to be claimed. I can assure them that there is no question of interfering with the law of Scotland, but simply of implementing the law of both countries. By Section 19 the Commissioners are given the right to prescribe forms upon which these claims are to be made, and this proposal seeks to provide that nothing in that Section is to prevent them from considering a claim signed by a person holding a power of

attorney, or some other agent on behalf of the claimant. There is nothing in the law to stop them considering a claim made on any form which they, the Commissioners of Inland Revenue, prescribe, so that in fact, the proviso does not make any alteration of the law at all.
The practice which the Commissioners follow is to require the claim to be signed by the claimant himself. The reason is that the relief is dependent in some measure upon his overseas income and it is thought by the Commissioners that, from their point of view, it is more satisfactory to make sure that they are not granting relief where such relief is not due. They may know that the actual claimant has certified that he has no overseas income. If the claims are accepted signed by an attorney, he may not be aware of the sources of income overseas which the claimant may have subsequently acquired, and that is why they have prescribed the actual form. During the war that practice was relaxed and was not insisted upon, but it is thought by the Commissioners that it is desirable that the former practice should continue for the reasons I have given.
I hope the Committee will agree that there is nothing to be gained by accepting the Clause, which in fact gives the Commissioners no more than the power they already have. If the hon. and gallant Member meant by his Clause—and it would have to be altered to achieve his purpose—to impose on them the duty to accept a claim made by an attorney on behalf of a claimant, I cannot advise the Committee to accept it. If the Commissioners were bound to do so, they would be in the position of having to allow claims when they could not be sure that the attorney really had disclosed all the sources of income overseas because he might not be in the know. For these reasons, the Clause cannot be accepted.
I would add that in these times, when postal facilities are good, it is not putting too much burden upon claimants to require them to sign the forms themselves. If a claim is submitted and the attorney is required to get it signed by the claimant, that is the precaution the Commissioners think it is necessary to take to ensure that they are fully appraised of all the sources of income they may be required to take into account in assessing the relief due. That is a neces


sary precaution. They have already the power to dispense with the signature of the claimant because they themselves prescribe the form.

Mr. Stanley: I regard the Solicitor-General's answer as wholly unsatisfactory. The first part of his speech I frankly thought seemed to be a pure waste of time. He was arguing, at some considerable length, that this Clause could not mean anything, although in the last few sentences he proceeded to explain what it did do. It is quite clear what it means.
In present circumstances the Commissioners of Inland Revenue have the power to prescribe, and among the things they prescribe is that these claims must be signed by the claimant. The object of the Clause is to remove from the power of that prescription this particular provision with regard to signature. If the Clause were accepted, it would have the effect that the Commissioners would no longer have the power to prescribe that these claims must be signed by the claimant. With regard to the merits of the case, it would appear that in the new Clause there does lie a certain simplification of procedure and the elimination of what would appear to be an unnecessary step.
11.0 p.m.
I should like to ask the Solicitor-General a question. He tells us that for many years during the war this provision was relaxed and that, in fact, for a considerable number of years what this Clause asks for was in operation. Has he any evidence whatever that during that time fraudulent claims or incorrect claims were made upon the Commissioners because claims were signed by an attorney and not by the claimant himself? Has he any evidence? Is the right hon. and learned Gentleman incapable of hearing or incapable of answering? It seems to me that it is an absolutely vital thing to know. If he can produce a certain amount of evidence that during these war years a certain number of incorrect claims were made, I could not support this new Clause, but if in fact there is no such evidence, and this simplification eliminates the necessity of sending documents to someone travelling abroad, I shall support it. If the simplier process of having these documents signed by an

attorney, as was the case for some years, has neither led to abuses nor loss to the Revenue, then I am sure the Committee will insist that the simplier method should be adopted.

Mr. Selwyn Lloyd: While the Solicitor-General is considering whether he should say "Yes" or "No" or "I do not know" to the questions asked him by my right hon. Friend, may I put this point to him because his reply, in the light of what has happened today, shows a wholly cynical disregard of principle. Had it not been for the Financial Secretary's lust for speed, I would have ventilated at an earlier stage my opinions on Clause 47. In subsection (6) of that Clause, it is specially provided that:
The references in this section to an agreement being come to with an appellant or claimant and the giving of notice or notification to or by an appellant or claimant include references to an agreement being come to with, and the giving of notice or notification to or by, a person acting on behalf of the appellant or claimant in relation to the appeal or claim.
There, in that new procedure dealing with the settlement of appeals, the Government have enacted today this specific provision that they should accept the word of an agent or person acting on behalf of a claimant. It seems to me to be quite contrary to the principle of that provision that they should resist this very modest proposal, and I urge the Solicitor-General to think about it again.

Mr. C. Williams: In view of what my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) has said, I feel that we should have a further answer from the Government on this matter. The hon. and gallant Member for West Edinburgh (Lieut.-Commander Hutchison), who raised this matter, has done an extremely good job. It is, however, not a purely Scottish question. It is a matter which can easily affect a large number of persons outside Scotland. It may easily affect a large number of people in my constituency. A large number of people in Cornwall have emigrated and are working all over the world. They are the type of people likely to be affected, and it is going to be a difficulty for them.
The Solicitor-General's reply was not satisfactory, although not quite so unsatisfactory as usual. He was, in effect, saying to the Commissioners that, as far as the Law Officers are concerned, they were perfectly willing that the Commissioners should not continue with this


practice. It has been pointed that with the experience of the war years there is no earthly reason why the relaxation should not go on. It has also been shown clearly, by the complete lack of any answer from the Government, that apparently there are no cases in which they have had to prosecute, or any trouble of that kind. In these circumstances, surely it would be reasonable for some representative of the Government to say that, although they may not be able to accept this Clause now, they hope that the Commissioners will go back to the principle that, as it was able to be done during the war, when the difficulties of checking fraud were so much greater, they will continue to use the method in present circumstances. If there is a Division, I shall certainly vote for the Clause, because anything which makes things easier, as this Clause does, and as the Commissioners can do if they wish, between us and our fellow citizens in the Dominions and overseas, ought to be supported. There has been no opposition to this in any part of the Committee.

Mr. Stanley: Is the right hon. and learned Gentleman going to give an answer to the question?

The Solicitor-General: I will certainly give the answer. It is that we have not the remotest idea. The only people who know whether they have oversea income are the people who get the relief. One of the reasons we want the claimants to sign the form is that we want to know, from their own pens, that they are entitled to relief.

Mr. Mitchison: I have the deepest sympathy with the numerous people who sought refuge in the prairies of Canada from the tedium of Torquay. I would not wish to make things any more difficult for them in the present than they may have found them in the past. I want to ask only one simple question: why is it more trouble for them to tell the Commissioners of Inland Revenue what their income is than to tell their attorney?

Mr. C. Williams: That question is entirely irrelevant, but I would like to tell

the hon. and learned Gentleman that one of the proudest aims of all Canadians is to come to Torquay some time, partly because it is so beautiful and partly because it has the best Member.

Mr. Stanley: The answer to the question is that it is much simpler at the beginning of every year to give your attorney in England all the particulars he requires—and which may not change from year to year—than it is for the Commissioners to send to a man whose address may be changing, in Canada or wherever it may be, documents which he has to sign and then return. The method adopted during the war was a simplification of that, and it has never been defended by the Solicitor-General.

Mr. Mitchison: I am tempted to ask one more question. How does the attorney know whether the income has changed since the beginning of the year?

Sir W. Darling: I should like to ask, on behalf of my constituents, who feel strongly on this matter, whether the Solicitor-General adheres to his statement that certain attorneys have been in the habit of sending in returns which might or might not be accurate. That is a slanderous statement and reflects on the Writers to the Signet and the Solicitors of the Supreme Court of Scotland.

The Solicitor-General: I never made any such statement.

Colonel Crosthwaite-Eyre: I am slightly puzzled by this matter. If one takes the converse case of a resident outside the United Kingdom, who wishes to make a return for Income Tax purposes, he is perfectly entitled to sign through an agent. That is good enough when the Treasury are collecting, but when they are paying out they are only willing to do so under this condition, and they demand the taking of this extraordinary precaution.

Question put, "That the Clause be read a Second time."

The Committee divided: Ayes, 121; Noes, 249.

Division No. 181.]
AYES
[11.12 p.m.


Agnew, Cmdr. P. G.
Bower, N.
Channon, H.


Assheton, Rt. Hon. R.
Braithwaite, Lt.-Comdr. J. G.
Clarke, Col. R. S.


Astor, Hon. M.
Bromley-Davenport, Lt.-Col. W.
Corbett, Lieut.-Col. U. (Ludlow)


Baldwin, A. E.
Buchan-Hepburn, P. G. T.
Crookshank, Capt. Rt. Hon. H. F. C.


Beamish, Maj. T. V. H.
Bullock, Capt. M.
Crosthwaite-Eyre, Col. O. E.


Birch, Nigel
Butcher, H. W.
Crowder, Capt. John E.


Boles, Lt.-Col. D. C. (Wells)
Challen, C.
Cuthbert, W. N.




Darling, Sir W. Y.
Lancaster, Col. C. G.
Raikes, H. V.


Digby, Simon Wingfield
Langford-Holt, J.
Rayner, Brig, R.


Dodds-Parker, A. D.
Legge-Bourke, Maj. E. A. H.
Renton, D.


Dower, Col. A. V. G. (Penrith)
Lennox-Boyd, A. T.
Roberts, Emrys (Merioneth)


Drewe, C.
Lindsay, M. (Solihull)
Roberts, H. (Handsworth)


Dugdale, Maj. Sir T. (Richmond)
Linstead, H. N.
Roberts, W. (Cumberland, N.)


Duthie, W. S.
Lipson, D. L.
Ropner, Col. L.


Eccles, D. M.
Lloyd, Selwyn (Wirral)
Ross, Sir R. O. (Londonderry)


Erroll, F. J.
Low, A. R. W.
Spearman, A. C. M.


Fletcher, W. (Bury)
Lucas, Major Sir J.
Stanley, Rt. Hon. O.


Foster, J. G. (Northwich)
Lucas-Tooth, Sir H.
Strauss, Henry (English Universities)


Fraser, H. C. P. (Stone)
Lyttelton, Rt. Hon. O.
Stuart, Rt. Hon. J. (Moray)


Fraser, Sir I. (Lonsdale)
McCorquodale, Rt. Hon. M. S.
Sutcliffe, H.


Gage, C.
McFarlana, C. S.
Taylor, C. S. (Eastbourne)


Galbraith, Cmdr. T. D. (Pollok)
Mackeson, Brig. H. R.
Teeling, William


Gammans, L. D.
Maclay, Hon. J. S.
Thomas, Ivor (Keighley)


George, Lady M. Lloyd (Anglesey)
Maclean, F. H. R. (Lancaster)
Thomas, J. P. L. (Hereford)


Grimston, R. V.
MacLeod, J.
Thorneycroft, G. E. P. (Monmouth)


Harden, J. R. E.
Macmillan, Rt. Hn. Harold (Bromley)
Turton, R. H.


Hare, Hon. J. H. (Woodbridge)
Macpherson, N. (Dumfries)
Vane, W. M. F.


Harris, F. W. (Croydon, N.)
Maitland, Comdr. J. W.
Wadsworth, G.


Harvey, Air-Comdre. A. V.
Manningham-Buller, R. E.
Wakefield, Sir W. W.


Henderson, John (Cathcart)
Marples, A. E.
Walker-Smith, D.


Hinchingbrooke, Viscount
Marsdon, Capt. A.
Ward, Hon. G. R.


Hogg, Hon. Q.
Maude, J. C.
Webbe, Sir H. (Abbey)


Hollis, M. C.
Moore, Lt.-Col. Sir T.
White, Sir D. (Fareham)


Howard, Hon. A.
Neven-Spence, Sir B.
White, J. B. (Canterbury)


Hulbert, Wing-Cdr. N. J.
Nicholson, G.
Williams, C. (Torquay)


Hurd, A.
Noble, Comdr. A. H. P.
Williams, Gerald (Tonbridge)


Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Nutting, Anthony
Willoughby de Eresby, Lord


Hutchison, Col. J. R. (Glasgow, C.)
Peake, Rt. Hon. O.
Winterton, Rt. Hon. Earl


Jeffreys, General Sir G.
Peto, Brig. C. H. M.
York, C.


Keeling, E. H.
Pickthorn, K.



Lambert, Hon. G.
Price-White, Lt-Col. D.
TELLERS FOR THE AYES:




Major Conant and Colonel Wheatley.




NOES


Acland, Sir Richard
Crossman, R. H. S.
Hall, Rt. Hon. Glenvil


Adams, Richard (Balham)
Daggar, G.
Hamilton, Lieut.-Col. R.


Albu, A. H.
Dines, P.
Hardy, E. A.


Alexander, Rt. Hon. A. V.
Dalton, Rt. Hon. H.
Hastings, Dr. Somerville


Allen, A. C. (Bosworth)
Davies, Edward (Burslem)
Haworth, J.


Anderson, A. (Motherwell)
Davies, Ernest (Enfield)
Henderson, Rt. Hn. A. (Kingswinford)


Attewell, H. C.
Davies, Haydn (St. Pancras, S. W.)
Henderson, Joseph (Ardwick)


Austin, H. Lewis
Davies, S. O. (Merthyr)
Herbison, Miss M.


Awbery, S. S.
Deer, G.
Hewitson, Capt M.


Ayrton Gould, Mrs. B.
Delargy, H. J.
Hobson, C. R.


Bacon, Miss A.
Diamond, J.
Holman, P.


Baird, J.
Dobbie, W.
Holmes, H. E. (Hemsworth)


Balfour, A.
Dodds, N. N.
Horabin, T. L.


Barton, C.
Donovan, T.
Houghton, A. L. N. D.


Bechervaise, A. E.
Driberg, T. E. N.
Hoy, J.


Benson, G.
Dugdale, J. (W. Bromwich)
Hudson, J. H. (Ealing, W.)


Berry, H.
Dye, S.
Hughes, Emrys (S. Ayr)


Beswick, F.
Ede, Rt. Hon. J. C.
Hughes, Hector (Aberdeen, N.)


Binns, J.
Edwards, W. J. (Whitechapet)
Hughes, H. D. (W'lverh'ton, W.)


Blenkinsop, A.
Evans, Albert (Islington, W.)
Hynd, H. (Hackney, C.)


Blyton, W. R.
Evans, E. (Lowestoft)
Irvine, A. J. (Liverpool)


Braddock, Mrs. E. M. (L'pl, Exch'ge)
Evans, John (Ogmore)
Irving, W. J. (Tottenham, N.)


Braddock, T. (Mitcham)
Evans, S. N. (Wednesbury)
Jay, D. P. T.


Brook, D. (Halifax)
Ewart R.
Jeger, G. (Winchester)


Brooks, T. J. (Rothwell)
Fairhurst, F.
Jeger, Dr. S. W. (St. Pancras, S. E.)


Broughton, Dr. A. D. D.
Fernyhough, E.
Jenkins, R. H.


Brown, George (Belper)
Field, Capt. W. J.
Jones, Rt. Hon. A. C. (Shipley)


Brown, T. J. (Ince)
Fletcher, E. G. M. (Islington, E.)
Jones, D. T. (Hartlepool)


Bruce, Maj. D. W. T.
Foot, M. M.
Jones, Elwyn (Plaistow)


Burden, T. W.
Forman, J. C.
Jones, J. H. (Bolton)


Burke, W. A.
Fraser, T. (Hamilton)
Jones, P. Asterley (Hitchin)


Butler, H. W. (Hackney, S.)
Freeman, J. (Watford)
Keenan, W.


Callaghan, James
Ganley, Mrs. C. S.
Kinghorn, Sqn.-Ldr. E.


Carmichael, James
Gibbins, J.
Kinley, J.


Chamberlain, R. A.
Gibson, C. W.
Kirby, B. V.


Champion, A. J.
Gilzean, A.
Lee, F. (Hulme)


Chetwynd, G. R.
Glanville, J. E. (Consett)
Leonard, W.


Cocks, F. S.
Grey, C. F.
Levy, B. W.


Collindridge, F.
Grierson, E.
Lewis, J. (Bolton)


Collins, V. J.
Griffiths, D. (Rother Valley)
Lindgren, G. S.


Colman, Miss G. M.
Griffiths, Rt. Hon. J. (Llanelly)
Logan, D. G.


Comyns, Dr. L.
Griffiths, W. D. (Moss Side)
Longden, F.


Corbet, Mrs. F. K. (Camb'well, N. W.)
Guest, Dr. L. Haden
Lyne, A. W.


Corlett, Dr. J.
Gunter, R. J.
McAdam, W.


Cove, W. G.
Guy, W. H.
McAllister, G.


Crawley, A.
Hale, Leslie
McGhee, H. G.







Mack, J. D.
Popplewell, E.
Thomas, D. E. (Aberdare)


McKay, J. (Wallsend)
Porter, E. (Warrington)
Thomas, George (Cardiff)


Mackay, R. W. G. (Hull, N. W.)
Porter, G. (Leeds)
Thomas, I. O. (Wrekin)


McLeavy, F.
Price, M. Philips
Titterington, M. F.


MacPherson, Malcolm (Stirling)
Proctor, W. T.
Tomlinson, Rt. Hon. G.


Mainwaring, W. H.
Pursey, Comdr. H.
Ungoed-Thomas, L.


Mallalieu, J. P. W. (Huddersfield)
Randall, H. E.
Vernon, Maj. W. F.


Mann, Mrs. J.
Ranger, J.
Wallace, G. D. (Chislehurst)


Manning, C. (Camberwell, N.)
Rees-Williams, D. R.
Wallace, H. W. (Walthamstow, E.)


Marquand, Rt. Hon. H. A.
Raid, T. (Swindon)
Warbey, W. N.


Mellish, R. J.
Rhodes, H.
Watkins, T. E.


Middleton, Mrs. L.
Ridealgh, Mrs. M.
Weitzman, D.


Mikardo, Ian.
Robens, A.
Wells, P. L. (Faversham)


Millington, Wing-Comdr. E. R.
Roberts, Goronwy (Caernarvonshire)
Wells, W. T. (Walsall)


Mitchison, G. R.
Robertson, J. J. (Berwick)
West, D. G.


Monslow, W.
Robinson, Kenneth (St. Pancras, N.)
Wheatley, Rt. Hon. John (Edinb'gh, E.)


Moody, A. S.
Ross, William (Kilmarnock)
White, H. (Derbyshire, N. E.)


Morley, R.
Royle, C.
Whiteley, Rt. Hon. W.


Morris, Lt.-Col. H. (Sheffield, C.)
Sharp, Granville
Wigg, George


Morris, P. (Swansea, W.)
Shurmer, P.
Wilkes, L.


Mort, D. L.
Silverman, J. (Erdington)
Wilkins, W. A.


Murray, J. D.
Silverman, S. S. (Nelson)
Willey, F. T. (Sunderland)


Nally, W.
Simmons, C. J.
Willey, O. G. (Cleveland)


Neal, H. (Claycross)
Skeffington, A. M.
Williams, D. J. (Neath)


Nichol, Mrs. M. E. (Bradford, N.)
Skeffington-Lodge, T. C.
Williams, J. L. (Kelvingrove)


Nicholls, H. R. (Stratford)
Smith, C. (Colchester)
Williams, Ronald (Wigan)


Noel-Baker, Capt. F. E. (Brentford)
Smith, H. N. (Nottingham, S.)
Williams, W. T. (Hammersmith, S.)


Oliver, G. H.
Snow, J. W.
Williams, W. R. (Heston)


Orbach, M.
Sorensen, R. W.
Willis, E.


Paget, R. T.
Soskice, Rt. Hon. Sir Frank
Wills, Mrs. E. A.


Paling, Will T. (Dewsbury)
Sparks, J. A.
Wilmot, Rt. Hon. J.


Palmer, A. M. F.
Stewart, Michael (Fulham, E.)
Woodburn, Rt. Hon. A.


Pargiter, G. A.
Stubbs, A. E.
Wyatt, W.


Parker, J.
Summerskill, Rt. Hon. Edith
Yates, V. F.


Paton, Mrs. F. (Rushcliffe)
Sylvester, G. O.
Younger, Hon. Kenneth


Paton, J. (Norwich)
Symonds, A. L.



Pearson, A.
Taylor, R. J. (Morpeth)
TELLERS FOR THE NOES:


Peart, T. F.
Taylor, Dr. S. (Barnet)
Mr. Hannan and Mr. Bowden.

New Clause.—(PERIOD OF VALIDITY OF DOG LICENCES.)

Section five of the Dog Licences Act, 1867 (which provides that Dog Licences shall be in such form and shall be granted by such officers of Inland Revenue as the Commissioners of Inland Revenue shall direct; and that every such licence shall commence on the day on which the same shall be granted, and shall terminate on the thirty-first day of December following) shall have effect as if for the words "on the thirty-first day of December following" there were substituted the words "at the expiration of twelve calendar months from such day."—[Miss Colman.]

Brought up, and read the First time.

Miss Colman: I beg to move, "That the Clause be read a Second time."
This Clause would result in a change in the period of validity of dog licences from the 12 months from 1st January to a period of 12 months from the date of issue. This may not seem to be a very important matter, although I think that it is quite as important as some of those which we have recently been discussing. It is a change which I have for long wanted to see, and I am quite sure that it has the support of a number of hon. Members on both sides of the Committee. It certainly has the support of dog owners and dog lovers everywhere.
I want to be very brief, but I should like to give three reasons why we suggest this change in the period of validity of dog licences. The first is that, unfortunately, many people have to get rid of their dogs when the licences become due, and that means that, as the licences are due on 1st January, the dogs are frequently turned on to the streets in the middle of the winter. This change would reduce the amount of suffering caused in this way.
The second reason for our proposal is that we think the change would help to reduce the amount of evasion of tax. At present, if a dog reaches the age of six months, or is bought or given to a person, say, in October or November, there is a great temptation not to take out a licence before 1st January. Much more important is that the present arrangement is very hard on the honest person who may buy a dog in October, obtain a licence, and in the following January have to buy another licence. I suggest that, for the honest person, the proposed change would mean a reduction in the burden of taxation. Another reason is that it would help the staff who have the job of issuing the licences. At present, these licences have all to be issued at the beginning of the year. Under the pro-


posed arrangements, the work would be spread over the whole of the year.
This matter has been raised in the House on several occasions, and it has been turned down on the ground that it would complicate administration; but it would be much easier to administer if the licences became due, not all on the same date, but on different dates. I would point out that wireless licences are issued for a period of 12 months from the date of issue and I think no difficulty is found in the enforcement of the renewal of those licences. For the reasons I have mentioned, I hope that the Financial Secretary will find that he is able to agree to the change which we now suggest.

Dr. Broughton: I wish to support this new Clause which seeks to substitute other words in Section 5 of the Dog Licences Act, 1867, and thereby make dog licences valid for 12 months from the date of issue. Following the conviction of a number of people for keeping dogs without licences in Batley and Morley there appeared in a local newspaper on 30th April, 1949, an article entitled "Licensing Confusion". I should like to quote a few extracts from it:
Some people have the idea that if a dog licence is taken out in March, July, or any other month, the renewal of the licence is not due until the same month the following year. Even though your dog was six months old in December, and you were honest enough to take out a licence, that licence must be renewed on 1st January.
Confusion arises in the minds of some people because of lack of uniformity in regard to the issue of licences. The wireless licence is due for renewal 12 months from the date of the first issue, no matter what month. The regulation in respect of wireless receiving sets, being the most modern, has undoubtedly influenced people to believe that a new general order was in vogue and that all licences are due for renewal on the date on which they were originally taken out.
The article also says this is a question upon which Government action should be taken. I think so, too. It is further suggested in that article—and this, I think, is important—
Probably some can ill afford the 10 shillings fine and a dog licence as well. Uniformity would also give some relief to the police who have more important things to do than spend their time calling upon people who have not renewed their dog licence, especially when the neglect may be due to a confused system.

I thought that was all very sensible, and I put a question on the Order Paper which was answered by the Financial Secretary to the Treasury on 5th May last. Supplementary questions by hon. Members suggested that the matter had raised some interest.

Lieut.-Commander Braithwaite: What was the Financial Secretary's reply?

Dr. Broughton: I am coming to that. Supplementary questions suggested some interest had been aroused, but my right hon. Friend said that the Treasury had had no complaint, and he was not then prepared to recommend the necessary legislation. Since then further convictions have been imposed on dog owners in the West Riding of Yorkshire. Here is a typical case, but I will omit the name and address, with permission, although they are in the newspaper which I have. A man was fined 10 shillings at Dewsbury (West Riding) court for having kept a dog without a licence. This man said he bought a dog licence last June, and thought that it ran for 12 months afterwards. I want to be absolutely fair in this matter, and for that purpose, I should like to quote a short extract from another article, also headed "Licensing Confusion" in the "Batley Reporter" of 14th of last month:
We can quite understand the impossibility of being able to make an estimate of the number of cases concerning people who do not realise that a licence taken out in any month becomes due for renewal on 1st January. Statements to that effect are made in defence by dogowners summoned and will not be recorded with the penalties imposed.
11.30 p.m.
Nevertheless, Major Milner, as my right hon. Friend the Financial Secretary informed the House on 5th May that there were 5,409 convictions for this offence in the first four months of 1948—these figures relate to England and Wales—I think it is quite reasonable to assume that some of them were genuinely due to misunderstanding.
In addition to what I have already said and what has been so ably said previously by my hon. Friend, there is one particular aspect of this matter I should like to stress. In my supplementary question of 5th May and in my remarks today, I have referred to the present law causing unnecessary work for the police. The position is such that "Punch," in


this year's Summer number, ridicules it. The artist shows a whole host of police officers descending upon a house to carry out their duties relating to "Rover's licence." This clever and amusing cartoon by Mervyn Wilson, whilst deliberately exaggerating the state of affairs, is based soundly upon an element of truth and I hope that my right hon. Friend the Financial Secretary will think also of doing a good turn to the police.

Mr. Glenvil Hall: It is perfectly true that, so far as we know, no very large number of complaints are made about the fact that at the moment dog licences are all renewable on 1st January each year, irrespective of the time when they were taken out. That does not apply to many other licences, as the hon. Member for Batley and Morley (Dr. Broughton) has pointed out in his very lucid and interesting speech.
I have taken occasion since the hon. Member for Tynemouth (Miss Colman) put this Clause on the Order Paper to consult with the Postmaster-General to see whether it would make any appreciable difference to the working of his Department and the staffs of post offices, and I understand that, as it would spread the work over the year, it would possibly be of some help to staffs who are in many instances grossly overworked. That being so, there seems no reason, if the Committee wishes to accept this change, why it should not be made.
The present Clause would be unacceptable and we should like to re-word it, if we may, particularly as we may have to make some reference to the exemption certificates for sheep-dogs. Therefore, when we reach the Report stage, if the Committee wishes, I will see that the appropriate wording is included on the Order Paper and that this change is made.

Lieut.-Commander Braithwaite: I am very interested in the right hon. Gentleman's statement, but I should like to have a little more information before we are asked to reach a definite decision on this matter. I was attracted by the new Clause when I saw it. I hope the Financial Secretary will tell us more. Is it true that we are saving the police any trouble at all by this change? At the present time anyone seen out with a dog after 1st January can be stopped and asked for

his licence. Henceforth that will no longer be so. Are we then to have the same sort of system of detection for unpaid dog licences as applies in the case of wireless licences, of which a particularly objectionable form is mentioned in a Parliamentary Question appearing on the Order Paper? There are vans going around the country detecting wirelesses——

The Chairman: The question of wireless licences does not arise on this new Clause.

Lieut.-Commander Braithwaite: I am asking whether this change will mean a similar form of detection. The hon. Member for Batley and Morley (Dr. Broughton) claimed this as a measure of relief for the police, but I suggest that it may work in the opposite direction. Is it not the case that the detection of anyone without a dog licence will be made considerably more difficult under this system? Are we to have more snoopers knocking at the door to see whether there is a dog on the premises? If so, I hope that they are going to get bitten on the leg.

Mr. C. Williams: I do not think that a new Clause of this importance should be accepted in any undue haste. I was interested in the speech of the hon. Lady the Member for Tynemouth (Miss Colman), and I very much appreciated the speech of the hon. Member for Batley and Morley (Dr. Broughton), who clearly showed his knowledge of the subject. I was hoping that the hon. Member for Batley and Morley would give us a more reasonable Committee speech of reasonable length on a subject of this importance. After all, this is not a proposal which will affect only the people of Batley and Morley. It affects the whole of Great Britain.
Those of us who welcome the fact that the Government are to accept this proposal ought to say how much we appreciate it, but does it go far enough? Why should a man have to get a new licence every year? Why cannot a licence be taken out for the life of the dog? That is, I suggest, a very reasonable suggestion. I am told that a dog licence costs 7s. 6d., and probably Members can think of some licences which cost the same amount—a marriage licence, for instance. The Financial Secretary has told us that


he will consider this suggestion between now and Report, so why should he not also consider at the same time the proposal I have made? If the Government are accepting the proposal contained in this new Clause, which has the support of both sides, except for the Liberal Party——

Mr. Wadsworth: We should like to support it, provided it includes Torquay.

Mr. Williams: I have now managed to gain the support of the second Liberal Party in the last two or three minutes. They might never have said a word if I had not spoken. I think I have now gained the support of the whole Committee. I observe the Law Officer looking suspiciously at me. We know that sometimes there has been terrifying disunity in the Government, but I hope that on this occasion they will not find it necessary to tear each other to pieces on a matter of dog licences.

Miss Colman: As my right hon. Friend has accepted the meaning of the Clause, if not the wording, for which I thank him, I beg to ask leave to withdraw the Motion.

Hon. Members: No.

Mr. J. H. Hare: I hate to disrupt the unity of which my hon. Friend the Member for Torquay (Mr. C. Williams) has spoken, but I should like to ask the Financial Secretary one or two questions, before he gives the concession. Will he give the Committee some idea of how much it will cost. I have only a limited viewpoint, but I am told that certain local authorities are strongly opposed to this concession. I understand that in London there are 130,000 dogs registered and that the London County Council employ six collectors to bring in revenue for that large population of dogs. I am told that if this Clause is accepted it will considerably increase the work of the London County Council and, therefore, presumably the ratepayers will have to bear the cost. It will require the sending out of reminders for licences which have expired, and instead of a yearly check it will require a monthly check.
I do not want to be a spoil-sport, but I hope the right hon. Gentleman will look

into the cost. I am told that he has not been very generous about footballers. I would not be surprised if, when he examines the problems which he is asked to impose on local authorities, he finds that the concession he has made will cost the country a great deal. Before he gives unqualified consent to the charming case, if I may so describe it, put forward by the hon. Member for Batley and Morley (Dr. Broughton), I think he should carefully inquire into the cost.

Mr. H. Strauss: There is one point I should like to raise in supporting the Clause moved by the hon. lady the Member for Tynemouth (Miss Colman), and in hoping that the Government will, on the Report stage, bring forward a better Clause to achieve its object. I think my hon. Friend the Member for Torquay (Mr. C. Williams) was wrong. I would put forward a point of law on dog licences so that the Financial Secretary may look into it. My hon. Friend talked about a licence for the life of the dog. In fact, the existing dog licence can last for longer than the life of the dog. The licence is a licence for a person to keep one dog. If the dog dies, another dog can be bought without a new licence being required, but paradoxically, if it is the husband who has taken out the dog licence and the husband dies, the wife must purchase a new dog licence.

11.45 p.m.

Mr. Birch: I think that we ought to have some answer on the question of cost. Is it going to cost more or less than giving benefits to footballers tax free?

Mr. Glenvil Hall: I cannot answer that. We are not dealing with footballers but with dog licences. It is not possible accurately to say what this will cost because it is an overlapping payment. People take out dog licences at various times, and renew them on 1st January of the following year. In future many will be taken out at varying times of the year. In the end it should even itself out, although not altogether. Where there are kennels, and a lot of dogs are kept, it may be found that the owner will prefer to take out the licences on, say, 1st January.
At the moment we do not know what the cost to the county councils will be, nor as far as Scotland is concerned, to the Exchequer. The income at the present


moment to county and county boroughs in England and Wales is in the region of £1 million a year. In Scotland, where the Customs and Excise collect it, the income to the Exchequer is about £70,000 a year. That is the best answer I can give.

Mr. Hare: Can the Financial Secretary answer my point about the extra cost of this concession to the county councils? That should be found out.

Mr. Glenvil Hall: As far as we know—and again I speak subject to correction as experience develops—we understand it will not make a great deal of difference. With wireless licences the Post Office send out reminders, and it is much better for them that reminders should be spread over a year than if they had to send them out all at the beginning of the year, which is a very busy time.

Mr. Hare: Has there been any consultation with the local authorities?

Mr. Glenvil Hall: I gather that they have been sounded, but I would not like to commit myself on that point.

Mr. Stanley: It would seem that they ought to have been consulted. After all, if there is a loss of revenue, and if it means extra work for them, the local authorities will be the chief sufferers. This promise has now been given without consultation with the local authorities. We should be assured that consultation will take place before the Report stage.

Mr. Glenvil Hall: I hope that under the new Exchequer equalisation grants this matter will be dealt with if there is any real loss.

Sir Jocelyn Lucas: Is it intended to operate the same system as with wireless licences, and for the Post Office to send out inquiries if licences have not been taken out? That surely will be a great deal more trouble.

Mr. J. Foster: Surely it is quite easy to work out the cost? What is wrong with this formula? Assuming dogs are acquired, for the purpose of licences, more or less uniformly over the year, the number of those acquiring dogs at the beginning of the year will be the same as the number acquiring dogs, say, at the end of the year. Therefore, the average is exactly in the middle. In other words

the overlapping is exactly 50 per cent. Reduce it by 10 per cent. for people who break the law, and the cost to the Exchequer will be just about 40 per cent. a year. There is no reason why the cost will even out because of the fact that at the moment, as the hon. Lady the Member for Tynemouth (Miss Colman) said, on the average everyone gets only about 50 per cent. of the worth of the dog licence.

Question, "That the Clause be read a Second time," put, and negatived.

New Clause.—(REVISED RATES OF ENTERTAINMENT DUTY ON CINEMAS.)

As regards payments for admission to cinema entertainments held on or after the 1st day of August, nineteen hundred and forty-nine, the following rates of entertainment duty shall be substituted for those set out in Part II of the Fifth Schedule to the Finance Act, 1943 (which relate to the rate of duty where the amount of payment exceeds 8¾d. and does not exceed 1s. 0½d., that is to say:—

Rate of duty



d.


Exceeds 8¾d. and does not exceed 10d.
5


Exceeds 10d. and does not exceed 11d.
7


Exceeds 11d. and does not exceed 1s. 0½d.
8½

—[Mr. J. Foster.]

Brought up, and read the First time.

Mr. J. Foster: I beg to move, "That the Clause be read a Second time."
The object of this new Clause is to enable owners of cinemas to charge 1s. 3d. a seat. At the moment, owners of cinemas very curiously can only charge either 1s. or 1s. 6d. A charge of 1s. 3d., according to the existing scale, which we are seeking to change, is an impossible price. The reason for that is that in the existing scale there is a very sharp rise between the duty attributable to seats which are 8½d. net to the cinema proprietor, and those which are 10½d. net to the proprietor. Therefore, if we take a 1s. seat, the division is as follows: 8½d. for the proprietor and 3½d. for the Revenue, which makes 1s. If a charge of 1s. 6d. is made, it is 10½d. for the proprietor and 7½d. for the Revenue. If a charge of 1s. 3d. is made, there is a curious result. There is a 7½d. tax, which leaves a net return to the proprietor of 7½d., so that when a charge of 1s. 3d. is made the proprietor gets less per seat than when he charges 1s., which is absurd.
I understand that in the last four years the Government Front Bench has been urged to change this anomaly. The view of the proprietors is that a charge of 1s. 3d. cannot be made, because if a charge of 1s. 3d. is made a 7½d. tax is taken off, and the net price is 7½d. But the net tax on 7½d. can only be 3½d., which makes 11d., and if it is 11d. it cannot be 1s. 3d. From this there arises a very interesting academic question whether to charge 1s. 3d. and pay the Exchequer 7½d. and get a penny less for a seat, or whether to charge 1s. and get a penny more. The position is that a proprietor cannot charge 1s. 3d., because when 7½d. is taken off it is found that the Revenue has to be paid 3½d., which makes 11d., and that cannot possibly be 1s. 3d. I do not expect on this occasion to be told that the genius of England consists in illogical compromises, and that the reason the English have been so successful in history is not by applying logic to taxes, but by taking the broad view of the English way of life, which enables us to deal with anomalies in a way not understandable by foreigners. I think this is a case of Alice looking through the looking-glass.
The object of this Clause is to enable a charge of 1s. 3d. to be made so as to encourage wider attendance at cinemas. The sum of 1s. 6d. for a cinema seat is outside the range of many people's pockets, and it is felt that 1s. 3d. will attract more patronage and will increase the revenue. It is not intended, and it would not be desirable from the point of view of the cinema proprietor, to reduce the 1s 6d. seats to 1s. 3d., nor is it intended to raise the 1s. seats to 1s. 3d. except in a few instances. What is wanted is a flexible range of prices so that the cinema proprietor can charge 1s., 1s. 3d. and 1s. 6d. Those who cannot afford 1s. 6d. will pay 1s. 3d. and will get a better seat than they formerly got.
It is to be noted that cinema costs are rising, and there is, I believe, an agreement with the theatre and cinema workers which will cost about two or three millions a year extra. From that point of view, the cinema proprietor is anxious to get a slightly higher revenue and to give better service, and at any rate a better seat at 1s. 3d. Northern

Ireland has seen the value of this proposal, and there they have introduced what is proposed in this Clause, what is called the new "fivepenny range," which will enable the cinema proprietor to get 10d. for himself and 5d. for the Revenue out of a total of 1s. 3d.
There is one other suggestion in this Clause—that between 11d. and 1s. 0½d. the rate of duty shall be 8½d., and that between 10d. and 11d. it shall be 7d., whereas at present it is 7½d. That would enable the cinema proprietor to get an extra halfpenny on the 1s. 6d. seats. It is thought that would be an inducement not to reduce too many of the 1s. 6d. seats to 1s. 3d., and also that it would show a better graded rise in the rates of duty. Instead of the present scales which run 3½d., 7½d., and 8½d., in future they would become 3½d., a new rate of 5d., a new rate of 7d., and then 8½d., as before.

Mr. Glenvil Hall: I want to say straight away that we are extremely sympathetic towards what it is hoped to do by this new Clause. I am very willing to accept the spirit of it, and between now and Report to have our experts draft a Clause in proper form. The scale of duty was drawn up in 1943, and at that time fitted what the cinema exhibitors desired. Since then it has been impossible to have seats at 1s. 3d., for the reasons given by the hon. and learned Gentleman. What we propose to do is to put down an Amendment which will not only cover cinemas, and permit seats to be sold at 1s. 3d., but also, in out view, the concession should apply to all entertainments liable to the full scale of duty, including motor racing, dog racing and horse racing. There is no comparable difficulty over the 1s. 3d. price for theatres, sports and other entertainments, so we propose to confine it to those I have mentioned.
We also propose that the concession should operate from Sunday, 31st July, instead of from 1st August, for the reason that a new accounting period then begins. We do not anticipate there will be any cost to the Exchequer. It is surmised that the loss of revenue by the loss of the ½d. duty on the 1s. 6d. seats will be offset by the extra receipts to be expected in cases where the tax of 5d. will be charged. I should like to add that it is


hoped and expected that smaller cinemas will benefit by this change. A substantial increase in wages has recently been given to employees in cinemas and we are told by the Cinematograph Exhibitors' Association that if this change is made it will enable them to meet these increased expenses, including the increases in wages to employees of the smaller cinemas.

12 m.

Lieut.-Colonel Sir Thomas Moore: I think the whole Committee will share the pleasure of the mover of this new Clause in the ready acceptance which the right hon. Gentleman has given to it, because we are all aware of the doldrums in which the cinema industry is now. The Government realised that when, under the Act, they pumped some millions of pounds into the distribution and production side of the industry, but ignored the one gap left unplugged—that is, the retail trader, the cinema exhibitor, the local manager and proprietor who have to sell the goods produced in the industry.
The price of 1s. 3d. seems to be the price which the bulk of our people are willing to pay. The cinema exhibitor was faced with the problem that if he charged 1s. 6d., he lost revenue, and if he went down and charged a large number of seats at 1s., then he lost again, and the Chancellor lost as well. The Treasury was a loser, the cinema industry was a loser, and the exhibitor was a loser. I believe that with the acceptance of this Clause, we shall give a new fillip to the exhibitor in our local cinemas.
I have brought to the notice of the right hon. Gentleman on one or two occasions that one or two small cinemas in my constituency have already gone bankrupt. I hope these facts enabled him to come to the wise and helpful decision he has indicated tonight. I believe he has done far more by this than by the pumping of millions of pounds into the distributive and production side of the industry to give fresh vitality to the cinema industry. Therefore, I warmly welcome this concession.

Sir W. Wakefield: At eight o'clock one morning three years ago, after an all-night sitting, I spoke at considerable length in proposing a similar new Clause.

On this occasion, I do not propose to detain the Committee more than one minute. Three years ago the Chancellor of that day did not consider it desirable to do what the present Chancellor is now doing. It is satisfactory to know that, although it has taken three years for the Socialist Government to do what has been necessary for three years, at long last it has been done. We only hope that, in regard to any other constructive suggestions made from time to time from this side of the Committee—constructive suggestions of far greater importance than this one—three years will not elapse before they are adopted. We are very glad to know that on this occasion the proposal has been sympathetically received.

Mr. J. Foster: I do not wish to speak in any grudging spirit, but I must say that what my hon. Friend said is quite true; namely, that the Government should have done this before. I am glad that they do regret that they did not do it before, because the reasons were the same.

Mr. Attewell: Did the cinema workers receive their increase three years ago, which is part of the case tonight?

Mr. Foster: No, but the reasons would have been just as good, because the object of this is to increase turnover. Surely the workers in the cinematograph industry must be in favour of increased production and the larger utilisation of empty seats. Their wage claim is something apart from that. The hon. Member for Harborough (Mr. Attewell) belongs to the school of thought which believes that restriction of production is the right weapon to use to get an increase of wages. I should have thought that increased production was the right argument to use to that end.
I wish to ask leave to withdraw this Clause on the assurance which the right hon. Gentleman has given. I do not call it a concession, because when that which is right is being done it is not a concession. I am sure that the right hon. Gentleman is just as interested in doing what is right as anyone else is, and I say that he is just belatedly doing what is right.
Motion and Clause, by leave, withdrawn.

Mr. R. J. Taylor (Lord of the Treasury): I beg to move, "That the Chairman do report Progress, and ask leave to sit again."

Hon. Members: No.

Mr. Stanley: This is a debatable point, and I claim the right to speak upon it. I want to speak because I am doubtful of the wisdom of the Committee's acceding to this Motion at present. I am as anxious as any other hon. Member of the Committee to go to bed, but I am also anxious that in going to bed we do not leave for another occasion a great deal too much work to be done. I consider that it should be an object of the Government roughly to divide the amount of work on these new Clauses between tonight's Sitting and our Sitting tomorrow night. But any hon. Member who looks at the Order Paper will see that if we are to adjourn now we shall only have done a small fraction of the work which lies before us. It seems to me to be quite wrong that we should adjourn early tonight with the certainty that we are leaving ourselves so much work to do tomorrow that an exceptionally late Sitting is entailed.
I have all the greater reason for urging that the Committee should continue, in that for once we have found the Financial Secretary to the Treasury to be in a melting mood. He has given to the Committee two Clauses running. Surely hon. Members on all sides of the Committee will realise what a mistake it would be to break off now, when we have for once got the Financial Secretary in that mood. Who knows how long it may go on? There are several new Clauses coming up in which I have the greatest interest. There is one, for instance, dealing with the major product of Scotland. Surely it would be unwise for any Scotsman to miss the opportunity, which now seems to present itself, of getting a concession from the Financial Secretary while the Chancellor of the Exchequer is away.
I do not know what idea the Patronage Secretary has in regard to the amount of work which remains. But I am sure that he will not quarrel with me when I say that it would appear to me that the amount left over will mean something like an all-night sitting tomorrow. If that be so, what is the explanation of this odd division of time? One would have

thought that the object of the Government would have been to try to even out the sitting of the Committee on any particular Bill so that we would not ever have to sit to the extremities of the morning. I guess from the movement of the Patronage Secretary's head that he agrees that an early rising tonight inevitably means a late night sitting tomorrow, and if he agrees to that, I cannot see how he can agree to a most improvident division of the work of the Committee. I hope that hon. Members will press for some reasonable explanation of what, to me, seems quite an irresponsible decision by the Government.

Mr. Glenvil Hall: I think that I can give that reasonable explanation—one which will seem reasonable to all reasonable men. As I think it is no secret that some of the Clauses on the Order Paper will, for one reason or another, not be called, I put that as the first point. The second is that, on this side of the Committee at any rate, if we sit much beyond midnight, we might as well sit throughout the night. I say that deliberately, and mean it. [HON. MEMBERS: "Why?"] Because the last trains will have gone, and hon. Members, having missed their last trains, will have to sit within the precincts of the House all night, and will think, therefore, that they could make good use of the enforced time spent here.
It appears to us, looking at the Order Paper in a sensible way, that if we started discussions, as we should, at 3.30 p.m. tomorrow, we should make fairly rapid progress; if one night has to be spent out of bed, we think it would be better to wait until tomorrow night, but it might be that we should not have sufficient to keep us going. It did occur to us that it would be reasonable to spent tonight in bed in the hope that we should not have to sit late tomorrow night; but if we have to sit very much longer, we would prefer to sit right through the night, and make a really good job of it.

Viscount Hinchingbrooke: I think that it would be very much wiser to take the decision now to sit all night to discuss these new Clauses; and as to what the Financial Secretary says about certain new Clauses on the Order Paper not being called. I think he should know that some of us have had information as to what will and what will not be called. Many of the matters are highly technical in


their nature and will take a great deal of legal and technical argument to get them across, even to the Financial Secretary. I should have thought it better to have gone on through the night and, also, if necessary, to sit late tomorrow.
Why cannot the Committee spend an all-night sitting on the Finance Bill? Last year, we had two all-night sittings, and the year before, if I remember rightly, we had three. What is the objection of hon. Members opposite? Facilities are available in the House, and we should have the fullest possible discussion, listening as carefully as we can to the replies forthcoming from the Treasury Bench. Hon. Members opposite are notably lacking in guts in their Parliamentary usage; if they are not prepared to sit here to deal with the vital business of Parliament, then it is making a mockery of Parliament. I suggest to the right hon. Gentleman that we should sit tonight and, perhaps, sit through tomorrow tonight.

12.15 a.m.

Sir Ian Fraser: I do not think that all-night sittings are desirable. I do not think the House ever does its best work during all-night sittings. There are inevitably contests of will which must arise in a free Parliament. If all-night sittings were to be limited in any way, it could only be done by some method of guillotine or regulation which would put all the power over the time of the House in the hands of the Government. That could only be the case where one had a totalitarian Government. I am sure it would not be the wish of this Government, in its present stage of development at any rate, to take such charge of the House of Commons.
There are necessary protests at times about all-night sittings. The House gets to the point where, for the sake of keeping things going, people talk needlessly. [Interruption.] It is all very well for ironical laughter to arise from the Benches opposite. Surely it was the whole case of the Financial Secretary that if hon. Members opposite had to stay after a certain time, they might as well go on. In all-night sittings it is not just the Opposition who keep the discussion going, but Government speakers keep it going because it happens to suit their convenience.
For myself and for all of us here, working hard as all of us do, I say that it is

more efficient for us to get to bed at 1 a.m. or 2 a.m. and start work again at 9 a.m. or 10 a.m. To do that two or three nights running is a thing which strong men can stand; whereas all-night sittings are very detrimental to the next day's work. I should not have thought that it was really the best course to curtail discussion tonight with the deliberate intention of running an all-night sitting tomorrow night. That does not seem to be a sensible division. [Interruption.] If hon. Members say "No," I will take the mind of the Committee back to what was said by the Financial Secretary. He said it was more convenient to Members opposite to stop now or to go on all night. I say it is wiser for the Committee to divide its work sensibly between the two nights.

Mr. Astor: I should like to say a few words on this matter because it is important. I support what the hon. Member for Lonsdale (Sir I. Fraser) said about all-night sittings, but the onus rests with the Government. I do not like obstructionist speeches, but, frankly, I think nearly all of them are provoked by the unwillingness of the Treasury Bench to state how long they are going on, or for some such reason. The Financial Secretary is concerned in his remarks about the way hon. Members speak. What would be far more reasonable, if we have a certain amount of work to do and the Government will not give us an extra day, would be to aim at getting through by 3 o'clock tonight, and the same time tomorrow night and the Government should have made arrangements for getting hon. Members home. The Financial Secretary cannot get away with this matter by saying there are no facilities for Members to sleep. I know personally that after 3 a.m. the standard of work inevitably tends to deteriorate in this Chamber.

Mr. J. Foster: Surely the over-riding principle is that the Committee should do its work properly. The proper way on this occasion is to divide the work between tonight and tomorrow. For that purpose, it is necessary to sit somewhat longer. The other principle which the Financial Secretary advanced is that Hon. Members—he said hon. Members on his side, but it applies to hon. Members on this side, too—will have to spend the night in the precincts of the Palace. I understand that, and I sympathise with


them, but that is not important enough to make the House of Commons do its work in a less efficient manner.
If Members opposite have to spend a night somewhat uncomfortably, one is sympathetic with them, but it is more important that there should be proper discussion up to a time when we can discuss complicated financial matters reasonably.
It is not a moral justification for Members opposite to say that because we are going to be here all night, we are, therefore, going to discuss the Finance Bill adequately all night. They know perfectly well that after 2 a.m. or 3 a.m., discussion on both sides is at a lower level, and that explanations given by right hon. Gentlemen on the Government Front Bench tend to deteriorate and become even less coherent than before.
Therefore, in the interests of good government and in the interests of the high standing of the House of Commons, it is essential that the work should be divided as far as possible so that on each night we do not go too late. The experts, taking the best view they can, estimate that we shall have to sit until 1.30 a.m. or 2.30 a.m., but it may not be necessary, of course, to sit late tomorrow. In any case, the work should be divided equally, which is much more important than the convenience of hon. Members.

Sir W. Wakefield: I cannot see why we should not go home right away, or why, as reasonable men, we should not go home early tomorrow. If we have not finished the Finance Bill by a reasonable hour tomorrow, why cannot another day be given later on? After all, the Whitsun holiday was rather longer than usual, presumably because the Government estimated there was plenty of time to complete the Business of the House during the remainder of the Session. There is no more important work to do, as far as the House of Commons is concerned, than carefully to study the Finance Bill during the Committee stage. Members have spoken of the inadequate way of doing our job if we go far into the night. I suggest that we pack up tonight, and that if we do not finish at an early hour tomorrow night further time be given for discussing the Finance Bill.

Lieut.-Commander Braithwaite: My hon. Friend the Member for St. Marylebone

(Sir W. Wakefield) has, of course, put his finger on the point, showing an easy way out of our troubles, but it seems to me that we have had an indication that the Government have decided on four days and are not prepared to make any concession. If that is so, we are back at the problem of the division of time. It really seems incredible that members of the Socialist Party are objecting to doing a lodging turn. After all, what are they trying to do with people in another industry?

Mr. Shurmer: We have not all got flats in London.

Lieut.-Commander Braithwaite: I can make a speech without being treated like a footballer on the other side by the hon. Member cupping his hands to his mouth and shouting out. The Financial Secretary told us that a large number of these new Clauses are not going to be called. I am not in a position to know about that, but there is a formidable list of subjects that have not yet been reached which are likely to be discussed.
There is an important new Clause, which comes next, in the name of my noble Friend the Member for Southern Dorset (Viscount Hinchingbrooke) on the subject of dependent relatives allowance. There is one on which hon. Members from Scotland will be bound to talk at length, on the Spirits Duty. It is a hardy annual, but it takes discussion. There is a large number of new Clauses on the subject of post-war credits. One at least of these will be called, presumably, and hon. Members in all parts of the House have for months past displayed anxiety on this, and are likely to wish to consider it at some length.
There is one in my own name, which has the support of both sides of the Committee, on the manner in which Income Tax demands are being made on ex-Service men relating to the years 1941, 1942 and 1943—a very important subject which many hon. Members are anxious to discuss. Then there is another new Clause seeking to exempt educational plays for Income Tax purposes and another on the double taxation of many sporting organisations such as football and cricket clubs. That is a selection from the Order Paper, without going into details. It gives us a formidable task tomorrow if we are to rise now.
I thought I saw an indication just now from the Patronage Secretary that he has made up his mind that there will have to be one all-night sitting. I think it is a bad division of labour, but if that is the case it might be better to have the all-night sitting when hon. Members are fresh after the weekend rather than tomorrow night. I should have thought it was unnecessary to have an all-night sitting at all. My hon. Friends who have addressed the Committee, particularly my right hon. Friend the Member for West Bristol (Mr. Stanley), made a point when they said that we should space out our work and should endeavour to work out just how far one would get if one divided the Order Paper into two. I am bound to say that I think the Committee would work more efficiently if that principle were accepted.

Mr. Stanley: I think that the Financial Secretary's answer was a complete justification for the fact that I did raise a question on the matter. He has laid down now the doctrine, I imagine on the authority of the Government and the Patronage Secretary, that the House of Commons either adjourns at 12 or sits to 8 a.m. and either has to scamp its work to get through by 12 or if it cannot, then, so that the people who have to be here shall have something to do, shall spin out its business, certainly under the worst possible conditions, and whatever the

business, until 8 a.m. I regard that doctrine put forward by the Financial Secretary as being quite destructive to the proper work of Parliament.

I am all for proper arrangements being made to meet the convenience of hon. Members who want to get home at a late hour, but I would remind them and the Financial Secretary that arrangements were proposed and put into effect in the early part of this Parliament, but were abandoned because not sufficient people were disposed to make use of them. Transport in the early hours was not at that time as widespread as the right hon. Gentleman would now have us believe, and if there has been some change in circumstances and if something during the last two or three years has reduced the number of cars which hon. Members are able to call on in the early hours, let us reconsider the whole question of transport. I would far sooner adopt any new proposals with regard to the provision of transport than accept willingly this new and, I believe, outrageous doctrine that either the House must scamp its work to get through by 12 or it must delay its work and go on to the early hours of the morning.

Question put, "That the Chairman do report Progress, and ask leave to sit again."

The Committee divided: Ayes, 156; Noes, 97.

Division No. 182.]
AYES
[12.32 a.m.


Acland, Sir Richard
Dye, S.
Hynd, J. B. (Attercliffe)


Adams, Richard (Balham)
Ede, Rt. Hon. J. C.
Irving, W. J. (Tottenham, N.)


Albu, A. H.
Evans, John (Ogmore)
Jay, D. P. T.


Anderson, A. (Motherwell)
Fernyhough, E.
Jeger, G. (Winchester)


Attewell, H. C.
Field, Capt. W. J.
Jenkins, R. H.


Baird, J.
Fletcher, E. G. M. (Islington, E.)
Jones, D. T. (Hartlepool)


Barton, C.
Foot, M. M.
Jones, Elwyn (Plaistow)


Bechervaise, A. E.
Forman, J. C.
Jones, J. H. (Bolton)


Beswick, F.
Fraser, T. (Hamilton)
Jones, P. Asterley (Hitchin)


Blyton, W. R.
Gibson, C. W.
Keenan, W.


Braddock, Mrs. E. M. (L'pl. Exch'ge)
Gilzean, A.
Lee, F. (Hulme)


Braddock, T. (Mitcham)
Glanville, J. E. (Consett)
Levy, B. W.


Broughton, Dr. A. D. D.
Griffiths, W. D. (Moss Side)
Lewis, J. (Bolton)


Burke, W. A.
Guest, Dr. L. Haden
Longden, F.


Butler, H. W. (Hackney, S.)
Gunter, R. J.
McAllister, G.


Callaghan, James
Haire, John E. (Wycombe)
Mack, J. D.


Carmichael, James
Hale Leslie
Mackay, R. W. G. (Hull, N. W.)


Champion, A. J.
Hall, Rt. Hon. Glenvil
MacPherson, Malcolm (Stirling)


Cocks, F. S.
Hamilton, Lieut.-Col. R.
Mallalieu, J. P. W. (Huddersfield)


Collindridge, F.
Hannan, W. (Maryhill)
Manning, C. (Camberwell, N.)


Collins, V. J.
Hastings, Dr. Somerville
Middleton, Mrs. L.


Corbet, Mrs. F. K. (Camb'well, N. W.)
Henderson, Joseph (Ardwick)
Mikardo, Ian.


Crawley, A.
Herbison, Miss M.
Millington, Wing-Comdr. E. R.


Crossman, R. H. S.
Hewitson, Capt. M.
Mitchison, G. R.


Davies, Edward (Burslem)
Hobson, C. R.
Morris, Lt.-Col. H. (Sheffield, C.)


Davies, Ernest (Enfield)
Holman, P.
Morris, P. (Swansea, W.)


Delargy, H. J.
Holmes, H. E. (Hemsworth)
Nichol, Mrs. M. E. (Bradford, N.)


Diamond, J.
Horabin, T. L.
Noel-Baker, Capt. F. E. (Brentford)


Dobbie, W.
Houghton, A. L. N. D.
Orbach, M.


Dodds, N. N.
Hoy, J.
Paget, R. T.


Driberg, T. E. N.
Hughes, Emrys (S. Ayr)
Paling, Will T. (Dewsbury)


Dugdale, J. (W. Bromwich)
Hughes, Hector (Aberdeen, N.)
Palmer, A. M. F.




Pargiter, G. A.
Sharp, Granville
Warbey, W. N.


Parker, J.
Shurmer, P.
Weitzman, D.


Paton, Mrs. F. (Rushcliffe)
Silverman, J. (Erdington)
West, D. G.


Paton, J. (Norwich)
Silverman, S. S. (Nelson)
Wheatley, Rt. Hon. John (Edinb'gh, E.)


Pearson, A.
Simmons, C. J.
Whiteley, Rt. Hon. W.


Peart, T. F.
Skeffington, A. M.
Wigg, George


Porter, G. (Leeds)
Skeffington-Lodge, T. C.
Wilkes, L.


Price, M. Philips
Smith, C. (Colchester)
Wilkins, W. A.


Proctor, W. T.
Snow, J. W.
Willey, O. G. (Cleveland)


Randall, H. E.
Sorensen, R. W.
Williams, J. L. (Kelvingrove)


Ranger, J.
Soskice, Rt. Hon. Sir Frank
Williams, Ronald (Wigan)


Rhodes, H.
Stewart, Michael (Fulham, E.)
Williams, W. T. (Hammersmith, S.)


Reid, T. (Swindon)
Stubbs, A. E.
Williams, W. R. (Heston)


Robens, A.
Sylvester, G. O.
Willis, E.


Roberts, Emrys (Merioneth)
Symonds, A. L.
Wilmot, Rt. Hon. J.


Roberts, Goronwy (Caernarvonshire)
Taylor, R. J. (Morpeth)
Woodburn, Rt. Hon. A.


Roberts, W. (Cumberland, N.)
Thomas, D. E. (Aberdare)
Wyatt, W.


Robertson, J. J. (Berwick)
Thomas, I. O. (Wrekin)
Younger, Hon. Kenneth


Robinson, Kenneth (St. Pancras, N.)
Ungoed-Thomas, L.



Ross, William (Kilmarnock)
Wadsworth, G.
TELLERS FOR THE AYES:


Royle, C.
Wallace, H. W. (Walthamstow, E.)
Mr. Popplewell and




Mr. George Wallace.




NOES


Agnew, Cmdr. P. G.
Grimston, R. V.
Nicholson, G.


Assheton, Rt. Hon. R.
Harden, J. R. E.
Noble, Comdr. A. H. P.


Astor, Hon. M.
Hare, Hon. J. H. (Woodbridge)
Nutting, Anthony


Baldwin, A. E.
Harris, F. W. (Croydon, N.)
Peake, Rt. Hon. O.


Beamish, Maj. T. V. H.
Harvey, Air-Comdre. A. V.
Peto, Brig. C. H. M.


Birch, Nigel
Henderson, John (Cathcart)
Pickthorn, K.


Bower, N.
Hinchingbrooke, Viscount
Raikes, H. V.


Bracken, Rt. Hon. Brendan
Hollis, M. C.
Rayner, Brig. R.


Brarthwaite, Lt.-Comdr. J. G.
Howard, Hon. A.
Roberts, H. (Handsworth)


Buchan-Hepburn, P. G. T.
Hulbert, Wing-Cdr. N. J.
Ropner, Col. L.


Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)
Hurd, A.
Ross, Sir R. D. (Londonderry)


Challen, C.
Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Spearman, A. C. M.


Channon, H.
Hutchison, Col. J. R. (Glasgow, C.)
Stanley, Rt. Hon. O.


Clarke, Col. R. S.
Keeling, E. H.
Strauss, Henry (English Universities)


Conant, Maj. R. J. E.
Lambert, Hon. G.
Stuart, Rt. Hon. J. (Moray)


Corbett, Lieut,-Col. U. (Ludlow)
Lancaster, Col. C. G.
Taylor, C. S. (Eastbourne)


Crookshank, Capt. Rt. Hon. H. F. C.
Langford-Holt, J.
Teeling, William


Crosthwaite-Eyre, Col. O. E.
Legge-Bourke, Maj. E. A. H.
Thomas, Ivor (Keighley)


Crowder, Capt. John E.
Lindsay, M. (Solihull)
Thomas, J. P. L. (Hereford)


Cuthbert, W. N.
Lloyd, Selwyn (Wirral)
Thorneycroft, G. E. P. (Monmouth)


Darling, Sir W. Y.
Low, A. R. W.
Turton, R. H.


Digby, Simon Wingfield
Lucas, Major Sir J.
Wakefield, Sir W. W.


Dodds-Parker, A. D.
Lucas-Tooth, Sir H.
Walker-Smith, D.


Drewe, C.
McCorquodale, Rt. Hon. M. S.
Ward, Hon. G. R.


Dugdale, Maj. Sir T. (Richmond)
McFarlane, C. S.
Webbe, Sir H. (Abbey)


Duthie, W. S.
Mackeson, Brig. H. R.
Williams, C. (Torquay)


Eccles, D. M.
Maclay, Hon. J. S.
Williams, Gerald (Tonbridge)


Elliot, Lieut.-Col. Rt. Hon. Walter
MacLeod, J.
Willoughby de Eresby, Lord


Fletcher, W. (Bury)
Macmillan, Rt. Hn. Harold (Bromley)
York, C.


Foster, J. G. (Northwich)
Macpherson, N. (Dumfries)



Fraser, H. C. P. (Stone)
Maitland, Comdr. J. W.
TELLERS FOR THE NOES:


Fraser, Sir I. (Lonsdale)
Manningham-Buller, R. E.
Colonel Wheatley and


Gage, C.
Maude, J. C.
Lieut.-Colonel Bromley Davenport.


Galbraith, Cmdr. T. D. (Pollok)
Neven-Spence, Sir B.



Question put, and agreed to.

Committee report Progress; to sit again this day.

RAILWAY BUFFET CARS (DESIGN)

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. R. J. Taylor.]

12.19 a.m.

Mr. Driberg: A few weeks ago the country was electrified by the news that the Railway Executive or British Railways were about to entertain their passengers with a new kind of buffetcar,

or, as it became known, tavern-car, embellished and adorned in mock-Tudor style. Words fail me, for once, to express the full horror and disgust that I felt when this announcement was made, and I think it will save time if I simply quote a sufficiently concise letter, of three sentences only, that appeared in "The Times" shortly afterwards:—
Sir,—The appearance on British Railways of tavern cars dressed up to look like old English inns with painted brickwork and false beams is the reductio ad absurdum of the mania for the fake antique. These cars are ridiculous, even by the silliest roadhouse standards. It is deplorable that a public authority should set such an example.


That letter was signed by the Director of the Victoria and Albert Museum, the Principal of the Royal College of Art, the Chairman of the Council of Industrial Design, the President of the Architectural Association, the President of the Design and Industries Association, the Principal of the Architectural Association School of Architecture, the Chairman of the Council of the Royal Society of Arts, the hon. secretary of the Society of Industrial Artists, the Chairman of the Institute of Contemporary Arts, the Master of the Faculty of Royal Designers for Industry, and by a former chairman of the Industrial Art Committee of the Federation of British Industries.
I do not think that my hon. Friend the Parliamentary Secretary of the Ministry of Transport, to whom I am grateful for waiting to answer this Debate, will suggest that these signatures were merely those of unpractical, "long-haired" aesthetes. That correspondence in "The Times" was paralleled by similar letters and comments in the "Manchester Guardian," the "Spectator," and in much of the responsible Press and the technical Press. The innovation also excited the attention of some of our most respected humourists, Beachcomber, Osbert Lancaster, and others.
I wrote to Lord Inman, Chairman of the Hotels Executive, to express dimly what I felt, and I received a letter in reply in which, inter alia, he said:
I think I should make it clear that any criticism or any praise cannot be directed to this Executive, as these particular cars were designed and initiated before we were constituted.
So they are a hang-over from private enterprise; none the less, I think it could legitimately be argued that the British Transport Commission are responsible for perpetuating them, in that they found them in the prototype stage, and did at least go ahead and develop them and put out this full-dress experiment. Lord Inman adds:
I do feel, however, that you are unduly severe in your criticism. We are constantly being asked for new and progressive ideas, and these cars are clearly in the nature of an experiment. It may be that in the light of experience alterations will have to be made.
"An experiment"? Yes—but at least five of these cars are now in service. They are called "The White Horse," "The Salutation," "The Jolly Tar,"

"The Dolphin," and "The Three Plovers." It was "The Three Plovers" that I personally visited a few days ago at Waterloo Station. I acknowledge gratefully that the very courteous official who showed me "The Three Plovers," when he observed how ill the whole thing was making me, did at once administer the appropriate medicine.
I am bound also to say there are at least two things about the experiment to praise wholeheartedly. The first is the general lay-out and idea of these tavern cars. I think it is an admirable idea, and quite different from the buffet cars which have been in existence for several years. I am not in the least surprised to hear that they have been very popular where they have been in use—but I think that they would have been equally popular, for what they are, whatever style the decoration had been in. I do not think that my hon. Friend would suggest that, merely because they are popular as an institution, that is necessarily an argument for this Tudoresque décor. I do not think either that it can be seriously argued, as has been argued in some quarters, that they will appeal to American tourists. If American tourists want to see old English taverns, they can see genuine ones stationary, rather than bogus ones whizzing along at 70 miles an hour.
The second respect in which these cars are praiseworthy, as I should like to assure my hon. Friend the Member for Hornchurch (Mr. Bing), if he were here, is that they are not tied houses. They are not tied cars. You can get a great variety of drinks on them, including even draught beer, which struck me as rather interesting in these circumstances. Incidentally, the arrangements behind the bar are excellent: they are in the most gleaming, modern style. There is no trace of Tudor whimsy behind the bar; all is purely functional. There is, however, one criticism that has to be made, and has been made fairly widely—that is, that though the windows, absurdly enough, have to be lattice windows, I do not see why they should be so high that you cannot see the scenery at all. That is also characteristic of the newest style of dining car. Apparently the idea is to hurry you along, so that you do not linger admiring the landscape after you have eaten the delicious meal.
I hope my hon. Friend will not fall back on the argument that this is only a question of taste, that one cannot argue about taste, and that, after all, one man's taste is as good as another's. Though I do not altogether admit that argument, even of the fine arts, it is the case that there is a distinct difference between the fine arts and the applied arts in this respect. This is not a Munnings v. Picasso controversy. In the applied arts—though there are, I agree, no absolute standards—there are some standards, above those of the speculative builder and the fumed-oak interior decorator, which are generally accepted by most reasonably civilised people; and especially by any reasonably civilised public body. It may well be that in a highly competitive industry, such as the newspaper game, "what the public wants" is all that can be considered; but in a publicly-owned industry I suggest that different considerations can and should apply.
The policy of the B.B.C., throughout its whole history, has not been to give the public what it wants, but to give the public something a little better than what it thinks it wants. The result of that policy, as we can see, looking back over 30 years, is the quite sensational improvement in the musical taste and knowledge of the people of this country, which is fairly commonly admitted. For instance, again, if my hon. Friend wanted a serious assessment of the merits of say, a series of posters on some quite different subject, such as road safety, even though they were intended to influence the popular taste, I suggest that he would not only, or would not first, go into the street and ask the first hundred passers-by what they thought of the posters. That would be a travesty of democracy. Besides consulting technical experts, he might, I hope, consult some group of fairly civilised people, people of some taste and discrimination, such as my learned Friend himself is, in his private capacity, and as I believe he may show himself tonight.
The important issue, of which these tavern-cars are merely a small and unfortunate illustration, is that public ownership offers the greatest opportunity since the days of aristocratic patronage for inspiring a real renaissance of the

public taste. We have extremely talented industrial designers in this country; yet I think it is fair to say that the idea of industrial design is still more acceptable to industry in the United States than it is to industry here. For instance, to take an example from privately-owned industry as remote as possible from the railways or from my hon. Friend's responsibility, no popular cigarette in England is sold in a packet the design of which bears any comparison with the beauty and clean modernity of the "Lucky Strike" packet, which I think was designed a few years ago by Raymond Loewe, one of the outstanding industrial designers in the United States. I do not think "Players" or "Gold Flake" are comparable with "Lucky Strike" in this matter of design.
I realise that some of what I am saying is beyond the responsibility of my hon. Friend who is to reply tonight. What is needed is, first, a consistent design policy for the nationalised industries; and, secondly, that design research should be up-graded to the same level as technical and marketing research. Incidentally, I would make a point which may perhaps be of practical value also in the export trades: that all industries should develop what may be called "pilot lines," in the contemporary idiom, to meet the inevitable change of taste in the American market. There are influences in the United States which are weaning the public taste from the antique. When this change of taste is fully developed, we do not want to be left standing.
Apart from this momentary aberration, transport has led the way in this country in modern design. We can be proud of what has been done by London Transport over many years, especially in contrast with transport in Paris or New York. I would conclude, if I may, with a short quotation from a book which I am sure will appeal to my hon. Friend the Parliamentary Secretary, for it is by Mr. Christian Barman, who is now Publicity Officer to the British Transport Commission. He speaks about these great new opportunities. He says:
Nowhere have these opportunities been more clearly apprehended and more skilfully utilised than in the transport undertakings in the London region that in the interval between the two wars came under the inspired management of the late Frank Pick. It has been truly said that only two other men, Sir Christopher Wren and John Nash, have made a contribu-


tion to the physical aspect of London comparable to that which we owe to these undertakings. Through their buildings, rolling stock and equipment generally, as well as through their posters and many other forms of publicity, they have made an impact which is not only physical but something having the quality of a moral force.…
There is no reason why the part played by public transport in our visual education should be confired to London.… A large part of our transport equipment is either worn out or obsolete, and much of it must of necessity be renewed as soon as labour and materials can be spared for this purpose. Our new stations and other buildings, our new roadside transport furniture, our new locomotives and vehicles, will be the best in the world if we set about this business properly. They will be the best, not because it is our wish that other nations should admire us and envy us, but because we know that a first-class environment makes the kind of people we intend to be.
A shoddy Tudoresque monstrosity is not a first-class environment.

12.56 a.m.

Mr. Henry Strauss: I think that the hon. Member has performed a public service by bringing this matter forward tonight. I do not think any action equally shameful to our national reputation has been done for a long time as the production of these ridiculous cars. It was more than a decade ago when I made a plea to this House to take steps to end the destruction of urban and rural England, and I made a plea for respect for good design. I mentioned such things as the work of London Transport, to which the hon. Member who has just spoken alluded, and I was associated with Frank Pick and others in the work of the Design and Industries Association. In that speech I drew the attention of the House to what I had noticed on a by-pass—" ye olde wireless shoppe."
That idiocy of some 12 years ago is easily surpassed by this action of British Railways. The Government have given encouragement—indeed it is a semi-public body—to the Council of Industrial Design. We know from the letter which the hon. Member referred to, what they think about it. If this sort of thing is to be permitted two consequences will follow: if the work of the Council of Industrial Design and the Design and Industries Association and similar bodies is to be treated with such contempt the Government had better be logical. The Council of Industrial Design had better be abolished and we should have mock-Tudor,

half-timbered, engines to draw the Flying Scotsman.
The thing is quite disgraceful. One can make jokes about it, but I feel as the hon. Member for Maldon (Mr. Driberg) feels about it. Almost worse than the letter he received from Lord Inman is the letter in "The Times" from the P.R.O. of the Railway Executive which says they will note the public reaction and see what the public thinks of it. I do not know how they will estimate the public reaction unless it is from those made sick inside and outside these tavern cars. I hope that, when the Parliamentary Secretary replies, he will not defend this thing in any way. The Parliamentary Secretary, whatever our political differences, is much too intelligent a man to have the least sympathy with what has been done, and I hope that he does not feel that his official duty compels him to defend this thing, which is outrageous, and has got to stop.

12.59 a.m.

Mr. Skeffington-Lodge: I shall not detain the House for more than a few moments, but I wish to support most strongly what has been said tonight. I regard these tavern cars as bits of bogus sentimentality. We have enough Hollywood mummery inflicted upon us already without adding to the far too big accumulation of it. I think that it would be a very good idea if British Railways added touches of fancy related to taste and dignity to our transport system, but for them to adopt a remarkably silly idea like this will lead, if they are consistent to such things as the erection of mock smoke stacks on the electric locomotives now being built for British Railways. Such a course would be quite fantastic.
What I would do with these tavern cars is to shunt them into one of Butlin's camps where they might fit into the scheme of things reasonably well. Perhaps alternatively they could be used for some sort of stage setting. At any rate, I trust that the design will be scrapped and that we can have in its place something genuinely appealing. Perhaps the most shocking aspect of the matter which has not been touched on so far, is that some of the shipping companies seem to be falling for the same idea. I read the other day of the decorations in the "Franconia," as follows:


There is a smoking room in the ship in half-timber with furniture chosen to match the Elizabethan atmosphere.
That I think may be the result of the influence of the lead given by the Transport Commission over these tavern cars. In regard to what the hon. Member for the Combined English Universities (Mr. H. Strauss) said about the Council for Industrial Design, we have not been told whether it was in any way consulted before this ridiculous step was taken. I should like my hon. Friend when he replies to deal with that point.

1.2 a.m.

The Parliamentary Secretary to the Ministry of Transport (Mr. James Callaghan): This has been an interesting little Debate which has focussed the points that have been made in the public Press during the last few weeks. A deluge of adverse expert opinion has fallen upon the Railway Executive, but I am bound to say it has been very good for business. The use to which these tavern cars have been put has exceeded the wildest expectations of the revenue that the Railway Executive ever hoped to get. Because of that I am sure the Railway Executive is grateful for the adverse criticism which has followed them about. The fact seems to be that nobody likes these tavern cars except the public, and the public have flocked to them and have found, as my hon. Friend the Member for Maldon (Mr. Driberg) said in his very temperate and reasonable speech, that they are well laid out inside and have many conveniences for the smaller sort of meals than the full-scale meal you get in the dining car.
My hon. Friend commented on some of the creditable points in these cars. There is one other I would draw to his attention and that is the excellent accommodation that is provided for the staff. They have got something which is new in this field. They have got accommodation reserved for them—the sort of thing we should all like to see—on a scale which is better than any previous buffet car or restaurant car I have seen.

Mr. H. Strauss: Is that any reason for making it Elizabethan?

Mr. Callaghan: I shall come to that in a moment. The hon. Gentleman was not very courteous in his comments, and he is not very courteous now. The hon.

Member for Maldon did say, and I agree with him, that it is important that we should get a proper and balanced view about this sort of thing, and I hope to project that in the few minutes left to me this evening. Of course, the Minister is not responsible—I ought to make that point straight away—for this design or for the type of carriages that are produced. That is the job of the Railway Executive. What the Minister obviously is interested in is that bodies such as the Council for Industrial Design, the Royal Fine Art Commission, and this sort of body, should have the opportunity of making their views known to the British Transport Commission. The hon. Member for Bedford (Mr. Skeffington-Lodge) asked whether they had been consulted about these particular tavern cars. The answer is that they were not consulted. They knew nothing about it. I am sure my hon. Friend would not expect me to say, or give an assurance that they should have the last word on matters of design so far as the railways are concerned. Indeed, quite the contrary.
What I think we shall find is that the British Transport Commission will be able to give lessons to many of these bodies in the field of railway design, and that their staff, designers and machinery are such as will enable them to take up the challenge of my hon. Friend. Here is an opportunity—and I readily accept what he has said—for a nationalised industry to lead in public taste. I can say, on behalf of the Transport Commission, that I am certain they will want to take up that challenge. My hon. Friend quoted from a Penguin just written by Mr. Christian Barman. He can be comforted by the fact that Mr. Barman holds a high position in the Transport Commission.

Mr. Baird: Why was he not consulted?

Mr. Callaghan: I have not said whether he was consulted, because I have not inquired into that point. As the machinery develops—and these cars take a long time to get from the drawing board—I think we shall find the Transport Commission need not bow the knee to anyone in the matter of public taste. I am bound to say that too much "hoo-hah" has been made about these restaurant cars. There has been a lot of exaggerated language used by people


who have not been within half a mile of them. I do not think there is anything exceptionally bad or good about them; they are nondescript. If I may say so, if they had been tenth-rate coaches in chromium and glass they would probably have passed and we should not have heard anything about them. But that would not be good enough litter. I want them to be first-rate in any material that is used.
I want to say publicly what has been said privately to the Railway Executive by my right hon. Friend, that they should not be deterred by this tremendous volume of criticism from certain quarters from going ahead with experiments in any nature of design they wish to undertake. Nothing but good can come from this controversy, and they will no doubt learn from what has been said about these particular cars.
I think that this will prove to have been a very profitable matter in more ways than one for the Railway Executive. The pioneer of this is the man who has designed the new double-decker coach

that is to appear in south-east London in the Autumn. He has great imagination and enterprise. He has done very good service, and I should not like to think that what has happened in this case will make the Railway Executive timid again, but that they can go ahead with the machinery they have devised and see that the canons of good taste are properly observed. I think that the result will then be something of which the Commission can be proud.

Sir Wavell Wakefield: I think that the Railway Commission ought to be congratulated on producing this monstrosity. It is obvious that they have done it with their tongues in their cheeks, and thank Heaven they have a sense of humour. It has been done to provoke controversy and publicity, and it shows that the Railway Executive are not afraid. I congratulate them on what they have done for that reason alone.

Adjourned accordingly at Ten Minutes past One o'Clock.